MISTRA Prepared by Anelile Gibixego - Scenarios 2030

Prepared by
Anelile Gibixego
MISTRA

THE FUTURE OF
UNEMPLOYMENT IN SOUTH
AFRICA
1.   Unemployment in RSA
2.   Causes of unemployment
3.   The future of the
     unemployed
4.   Solutions for the
     unemployed
5.   Conclusions
6.   Acknowledgements

UNEMPLOYMENT
▪ Labour force: Viable individuals aged between 15 -64

▪ Structural unemployment: Long term unemployment as a result of a country
 being unable to absorb all those eligible into the labour force

▪ Cyclical unemployment: Demand-deficient unemployment. Occurs during a
 recession phase of the business cycle

▪ Frictional unemployment: Temporary unemployment which exists due to people
 being in the process of moving from one job to another.

▪ Household Work: Caring of children, elders, managing a household

UNEMPLOYMENT
STATISTICS
 Unemployment rates (RSA) according to gender from 2008 – 2017 (StatsSA)

Unemployment rates in RSA according to labour force participation 2008 to 2017

Individuals not in education, employment or training (NEET) for youth aged 15-24 in RSA according
                           to race and gender from 2008 to 2017 (StatsSA)

Unemployment rates in RSA according to level of education from 2008 to 2017 (StatsSA)

CAUSES FOR
 UNEMPLOYMENT
▪ Bi-directional causality - Poverty trap and
 apartheid legacy
▪ Lack of skills and education – Poor basic
 education and training
▪ Ineffective looking
▪ Poses a threat to the dignity of people ( lack
 of education, lack of sanitation, high affinity to
 crime)
▪ Lack of purpose:
“Work is an essential part of God’s original
purpose for human life at creation.” Cloete, 2015

SKILLS AND TRAINING
▪ Learners are illiterate in English and Maths when they
 leave Grade 12
    ▪   Teacher effectiveness
    ▪   Technical and Vocational Education and Training (TVET)

▪ South Africans have been studying, why is the UR
 increasing?
    ▪   Qualifications obtained are of little use in the workplace

▪ SA can no longer create jobs for the skilled workforce
 we wish we had instead must create the jobs for low-
 skilled and low wage jobs (CDE)

▪ Expand the pool of skills available to the South African
 economy
    ▪   a solid foundation of knowledge and skills
    ▪   recruiting skilled people from abroad
                    -Australia

4TH                INDUSTRIAL REVOLUTION
▪   Artificial intelligence, advanced robotics, autonomous
    and near autonomous vehicles and 3-D printing
▪   Sustainable development
       Increase in Economic Profitable business models –
        higher efficiency & quality
       Decrease environmental impact (Virtual
        communication, less GHG emission and less waste
        production )

▪   Technical unemployment
      ▪       Slowly making skilled workers absolete
▪   Creative destruction
      ▪       Old jobs will be lost and new jobs will be created
▪   Disruption
          ▪    Automation of certain industries

THE PRECARIAT- THE NEW
DANGEROUS CLASS
▪   Viable individuals that aren’t in training, education or employed
    (NEET)
▪   No access to the economy
▪   Unstable income and employment
▪   Vulnurability
     ▪ Scams, debt and undignified work
     ▪ Mental illness (Anxiety)
     ▪ Suicide & nihilism

▪   Who is in this class?
         Artistic people and the “free spirited”
         Not permanently employed
         Migrants
         Fresh graduates
         Convicts

THE PRECARIAT- IN SOUTH
  AFRICA?
▪ Lack of access to the seven forms
 of labour related security
  ▪   Labour Market
  ▪   Employment security
  ▪   Job security
  ▪   Work security
  ▪   Representative security
  ▪   Skill production security
  ▪   Income security

▪ Demonstrations
      946 323 working days lost as a result of
      122 strikes in 2016 - Industrial Action report

WAITHOOD
▪ Prolonged period of suspension
  between childhood and adulthood
▪ Recent protest movements, led by
  young people, stem directly from the
  economic and social pressures they
  suffer, and from their pervasive political
  marginalisation
▪ These social movements have been able
  to overthrow regimes, systemic
  transformation takes time and requires
  more than a mere change in leadership

Introduction of a Basic Income Grant
Advancement of SMMEs
Public and civil service

BASIC INCOME GRANT
▪ Basic income stipend without a condition or a means test as opposed to the current
 system
▪ Positive Impacts:
  ▪   Children: Education ( increase in attendance and in affordability and the child
      will not have to work to boost household income) -Brazilian bolsa escola schemes

  ▪   Women: Afford to go look for work, Community work and voluntary work and
      informal petty farming                 -Brazilian bolsa escola schemes

  ▪   Economy: Increase as more people are participating in it

  ▪   Social Impacts: Increase in dignity, nutrition and encouragement
                  Increase in morale and innovation

BASIC INCOME in South
   Africa?
    ▪   Cost Impacts and affordability
    ▪   Inflamattory – means test (not everyone)
    ▪   Induce unproductivity
    ▪   Lowering of wages

COSATU: BIG should be included in the country’s
comprehensive social security plan, which is
currently been drawn up by government. –Nov ‘17

Public Service: Individuals entering public and
civil service for a stipend

SMALL, MEDIUM AND MICRO
           ENTERPRISES
▪ Needed for the economy:
   - 66% of the gross domestic product (Global
entrepreneurship monitor 2016/2017)

▪ Job creation & alleviate poverty
      - Innovation and creativity

▪    Independence:
    “Informal business owners created work with
    benefits beyond income” Roncolato1 and Willoughby,
    2017

WHY DO SMMES FAIL?
▪   75% of SMMEs fail in the first 42 months

▪   SMMEs have support from
National Empowerment Fund (NEP)
Small Enterprise Development Agency (SEDA)
National Small Business Advisory Council

▪   Failure because of economic unsustainability
    ▪   Finances
    ▪   Location & Network
    ▪   Management

CONCLUSIONS
▪   SMMEs are feted to be the future of business, representing 40 percent of all
    business in SA; it has been forecast by the National Development Plan that by
    2030, 90 percent of all new jobs will be in SMMEs.
▪   Projected unemployment rate will be 28.6% by 2022
▪   Industry 4.0 will cause a change in unemployment – many jobs will be made
    redundant but the human is required
▪   A BIG with condition would assist the unemployed and curb further protests

ACKNOWLEGEMENTS
▪   Thank you to the center for
    development and
    enterprise and the Institute
    of Futures Research for
    their contributions towards
    this research topic