SA needs a younger workforce

VITAL: The importance of quality education can never be downplayed and while it may give them a fallback, young people must be encouraged to participate in the economy. PICTURE: NYDA

“YOUNG people’s values determine the values of the future society.” With these words, Chinese president Xi Jinping addressed students at Peking University in 2015. The formation of a society is like tying on a coat, Xi went on to explain, if one tied the first button incorrectly, that is, the youth of society, the rest of the buttons would also be done improperly.

As South Africa contemplates radical socio-economic transformation, young people and their futures must be at the forefront of concerns. The future of our country today depends largely on the decisions we make today in respect to our young people and their near future. Statistics South Africa, this year released its Survey of Activities of Young People, 2015, wherein it documented the current activities of South Africa’s young people between the ages of seven and 17.

The survey details activities in schooling, training, and even the non-participation in these. The data also indicates other activities these young men and women are involved in and details information such as home chores and trade, among others. Currently, South Africa has more than 11 million children between the ages of seven and 17. In other words, a fifth of our country’s population is within this category.

If one were to add the age group 17 to 35, we could easily pitch young people at half of South Africa’s population. Among the 11 million South Africans between seven and 17, a fifth or 21% were engaged in economic activities. The age categories most likely to be involved in this economic activity are between the ages of 15 and 17, immediately after compulsory schooling age. In both 2010 and five years later in 2015, the survey found that young people attending school were less likely to be involved in economic activities. In this age group, 98% attended school with the number of girls being higher than boys. The highest proportion of those children involved in economic activity relating to trade even though there was a decrease between 2010 and 2015. About a third of those children who were working were exposed to hazardous working conditions.

The survey also indicated that although there was a decline in the number of child labour in South Africa, in 2015 over half a million of children were still involved in child labour. The decline in these numbers were just more than 200000 children while children aged 16-17 were most likely to be involved in child labour. African children were more likely to be child labourers than any other racial group while in a province such as KwaZulu-Natal, 10% of children were employed as child labourers. With this as a backdrop, the importance of quality education can never be downplayed in our current circumstances, especially in the view of South Africa’s future.

The fact that the overwhelming majority of children are in school does not necessarily mean that they are being prepared to be productive and active citizens of the country. Indeed while literacy levels are low, the depth of these literacy levels are very shallow. Sadly, these trends continue to mimic past patterns of race. In light of this, not every entrepreneur needs to attend colleges or university and our country desperately needs entrepreneurs. While education may give them a fall back, it is vital that young people in South Africa are encouraged to participate in the economy.

This may occur even while furthering their education, precisely through startups, trade, small savings and the like. Julie DaVanzo and her colleagues released a working paper in 2011 comparing the demographic dividend of China and India, and what this dividend will reap for each country with a young population, by 2025. First China and now India, which will soon pass China, benefited from a young working population. The paper outlines how for 20 years, between 1980 and 2000, India and China were able to increase productivity mostly due to the shift from agriculture to industry and services.

Economic growth occurred because a young, working population was ensuring high participation rates in the labour force. DaVanzo and her colleagues continue to assert that today India’s labour force is and will continue to be younger than that of China’s due to the population measures put in place by China. The advantage of having a young labour force is that they are adaptive and that generally young people are better trained and educated than older people. However, again, the structure of the economy and where these young people spend their time and energy remains pivotal. For example, India has invested heavily in the tertiary sector in industries such as call centres and financial services. As DaVanzo’s work points out the adaptivity of a young population allowed for the transition from an agricultural based economy, which is primary sector, to a industry and services one, which is tertiary sector orientated.

In the area of tertiary education, the state in SA should also intervene to ensure that tertiary education creates the jobs and provides the skills needed by the economy. This will have the added advantage of limiting the number of unemployed graduates. Where radical socio-economic transformation becomes pivotal is the restructuring of the South African economy. Why does the economy need restructuring many ask but the latest quarterly GDP figures indicate this need for change.

Many were relieved and excited that the economy grew by 2% in the third quarter of 2017. Yet the largest contributor to this growth was not the tertiary sector, which countries such as India and China rely on for growth, but the primary sector. Growth in agriculture, forestry and fishing grew by 44% in that quarter. Mining, another primary sector industry, increased by more than 6.5% while manufacturing, a secondary sector industry, grew by more than 4%. In contrast, tertiary sector industries such as government services and trade decreased while secondary sector industries such as electricity and construction also decreased. As a result, we should be getting more young people into industries such as trade, transport, finance, government services and personal services. At the same time, China and India made sure not to neglect secondary sector industries such as manufacturing, construction and electricity.

Yet even more so they ensured that their young people were given the opportunity to enter the labour force, skilled with the necessary training but ready to work. State-owned enterprises play a critical role in the developmental state through the financial muscle that they possess. State-owned enterprises have the opportunity to contribute to economic growth and job creation by creating set asides for small and medium enterprises to create a market access and linkage value chain.

This can lead to development of secondary sector players while breaking down monopolies that exist and benefit only a handful rather than the majority. Radical socio-economic transformation entails hard decisions. Maybe one of those hard decisions is to implement the retirement age at 55 in South Africa rather than 65. Indeed, for the state, this would mean an immediate and drastic, increase in social old age pensions. Yet maybe this is the price to pay to ensure that new, young people are entering the workplace instead of older workers retiring later.

This should be supported by a scrapping tenure of previous employment (experience) requirements for aspirant job seekers. This would significantly increase the employability of young people in the country and go a long way to creating a youthful, agile and energised workforce.

Sifiso Tso Mtsweni is the chairperson of the National Youth Development Agency and a member of the NW ANC Youth League