Unemployment and the Great Gatsby Curve

2015-06-17 00:44

When South Africa’s unemployment rate is higher than Greece, surely the country is in crisis? StatsSA reports around 20 million South Africans, including those discouraged, are jobless while; Eskom proposes a tariff hike amidst the gloomy economic growth prospects and rising inflation. So far education has become a main focus to addressing the contraction of the economy with emphasis on the youth’s insufficient skills.

Currently, the structure of the South African economy favours the skilled and semi-skilled due to the volatility of the labour intensive unskilled market. Strikes for higher wage rates hinder the development of labour intensive production lines which, increases the favourability of capital intensive production.

Despite the necessity to improve South Africa’s education system which has been a topic of debate for decades, there are limited options on moving forward in the short term. On the one hand, there is a need to alleviate poverty and improve the socio-economic conditions of those still wounded by the Apartheid government. Welfare and wage negotiations must take into account the pressure those lucky enough to be employed undertake, such as supporting large extended families. In times of dire unemployment and rising costs of living these burdens rise and strikes are increasingly likely.

On the other hand, the only way to stimulate the economy is through increasing overall production. Regardless of wage talks, South Africa is in desperate need of labour intensive production. However, selling the concept of lower wages to those unemployed is a somewhat slap in the face following South Africa’s gold medal ranking in income inequality.

Recent research by Patrizio Piraino sheds light on South Africa’s “Great Gatsby Curve”. 21 years into a democracy economic mobility is still severely restricted, due to the lack of redistribution. The white demographic despite, being the minority, accounts for 40% of the “continued positioning at the top”.

The South African pie needs to be shared more equally. According to StatsSA, this is especially considering the black and coloured demographics access into the growing semi-skilled and skilled sectors. Socio-economic factors play a large role in one’s economic mobility and hence, should be addressed adequately.

South Africa is in a pickle of sorts. With a growth rate far below 5%, it is unlikely to efficiently generate any new jobs.

The criticism on the youth for entitlement and dreams of “instant success” is harsh. The reason for the relatively higher youth unemployment stems from mistrust in the youth and their capabilities. The youth, despite their lack of concrete experience and skills, have access to more knowledge and information than ever before. Arguably, it may make us lazy but at a click of a button more South Africans have access to the internet.  Talk of South Africa’s growing online presence has sparked noise in social media and cellular networks but little has been analysed on its use for education.

Perhaps, the older generations forget we are living in the 21st century. Education no longer occurs only in a classroom with a teacher. South Africa spends billions on education annually that simply never meets the mark. Providing the youth with access to the internet will allow them to broaden their scope like never before. More emphasis on SELF TEACHING and learning resourcefulness will allow children from poorer socio-economic backgrounds to uplift themselves from the Great Gatsby Curve.

Budgeting for education should consider computer labs for communities requiring a boost in economic mobility. It will provide them with the essential technological skills required to compete in a modern labour market, as well as additional educational platforms and an array of job opportunities online. South Africa is in need of an internet transformation, in terms of censorship, privacy and particularly cost. It's time we embraced technology and look for alternative education reforms.

In addition, Mmusi Maimane reiterating the need for the Youth Wage Subsidy is vital in honing the skills of South Africa’s unemployed youth. The astounding unemployment figures represent the million minds of our future still untrained and incapable of sustaining the economy in the long term.

However, majority of those currently job seeking have education levels below matric. The Agriculture, Forestry and Fisheries department (DAFF) declaration to encourage the youth to pursue careers in agriculture is another excellent opportunity, if carried through. With the agricultural sector booming in the first quarter absorption of many unskilled workers remains a top priority. The agricultural sector remains South Africa’s saving grace.

South Africa may go on as normal but we’re in a crisis. We are required to do what we can, with what we have. Ubuntu: I am, because you are. Unity is required now more than ever. It is time we put aside our differences and prejudices with regards to age, race and wealth and work together to achieve the Nation we all know can be accomplished.

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