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Table of Contents

Introduction.

Research questions.

Factors that lead to an increase in the unemployment rate in South Africa.

Labour demand.

Financial crisis.

Lack of interest in entrepreneurship.

Slow economic growth.

Nepotism..

Factors that lead to reduce unemployment rate.

Demand-side policy.

Fiscal policy.

Monetary policy.

Supply-side policies for decreasing unemployment

Employment trends in upcoming years for South Africa.

Recommendations.

Conclusion.

References.

Introduction to Unemployment in South Africa

This study aims to critically evaluate the research topic that is the “unemployment in South Africa”. Unemployment is one of the biggest issues that most of the countries are facing and even in South Africa, this is one of the greatest issues that need to be eradicated for the development of the country. There are numerous reasons that lead to unemployment in South Africa. The unemployment in South Africa is not caused by low levels of economic growth but also caused due to several other reasons. This study will discuss all the factors that growing unemployment and the trends over the past forty years that leads to unemployment in South Africa. This also rises on the factors that lead to unemployment but also recommend various actions that lead to eradicating the unemployment issue in South Africa (Benedict, Mofolo & Adefuye, 2020).

The unemployment in South Africa has been increased by four-point six per cent in the last ten years and which is the most concerning issue for the government of South Africa. Unemployment refers to the individual who is unemployed and seeking for job opportunities but they are not able to find a job. This issue is faced by many countries but South Africa have recently had a downfall in the rate of unemployment. There are various types of unemployment such as the demand deficient unemployment, frictional unemployment, structural unemployment, voluntary unemployment etc. The impact of unemployment will be faced by both the workers and the national economy that leads to creating a ripple effect on both of them. Sometimes unemployment may be caused due to the lack of financial crisis as due to COVID-19 there are various companies which seem to be shut down due to the financial interruption in the organisations. This study will demonstrate all the factors that lead to impact the unemployment in South Africa.

Research Questions: Unemployment in South Africa

  • Factors that lead to increase the unemployment in South Africa?
  • Factors that lead to reduce the unemployment rate in South Africa?
  • What will be the employment trends in the upcoming years for South Africa?

Factors that Lead to An Increase in The Unemployment Rate in South Africa

Unemployment is the major issue for South Africa as it is a global phenomenon given the sluggish world economy. The major cause of unemployment in South Africa is the education level attained by the youth which has a lack of skills and technical knowledge gained by the youth. Unemployment is one of the biggest problems which made progressively increases with decrease education level and education level of South Africa. It is not producing the skilled labour for the labour market (Malan, 2017). This is also due to the deliberate exclusion of black people from the educational system and from the school of an application under apartheid contributed to high rates of unemployment today. There are various gaps observed in the education system of South Africa. The labour market needs the employees that have acquired good leadership which needed to accomplish the predefined goals of the organisation.

The South Africa education system has a lack of standards facilities provided to the students. In terms of infrastructure, the infrastructure of the schools is not up to the mark and it will lead to impact the training and the education of the students. There is a wide difference between the black and a white person in the schools which may lead to an imbalance in the education system of South Africa. Apart from this, certain things need to be addressed by the Government of South Africa in order to eradicate the unemployment issue by providing proper education to the student and enhancing the standards for education facilities (Brewster, 2017). Apart from this, enhancing the sanitation and electricity condition are one of the major issues which pointers students to skip their schools and not focusing on education.

Labour Demand

The demand for labour in the market is rising day by day but the number of job seekers over the years is increasing and the demand for labour for the organisation has a certain imbalance. The job seekers of South Africa include the male, as well as female and this number, is increasing day by day and the number of jobs is not available for that number of candidates (Mowers, 2017). The industries and the companies want to hire labour that is capable of handling the pressure and competition. The leadership style that helps the organisation to accomplish all the define goals needs by the industries. But the market has unskilled labour and therefore the organisation does not employ these kinds of labour and the number of job seekers is increasing over the years. However, the population of South Africa is mostly young people and a large number of people is entering into the labour market as compared to the jobs that are available in the labour market.

Financial Crisis

After the effect of 2009 and 2008 Global recession, many workers lost their jobs and this may lead to highly impact the employment rate. South Africa strongly hit by the aftershock in the firm which impacts on the real economy (Sefa-Nyarko & Afram, 2019). The great recession also impacts the trade of the country which ultimately impact the industry manufacturing units. Recession is the situation when all the countries are unable to pay to their employees and without any reason, they need to fire their employees.

Lack of Interest in Entrepreneurship

 Due to globalisation industrial market is rising day by day and many countries are raising entrepreneurs’ and motivate the youth to start their work and earn. However, the scenarios are different in South Africa as there is a lack of interest for entrepreneurship among the youth which leads to taking the serious opportunity in business for South Africa. Entrepreneurship is one of the key factors that lead many countries on the path of success in terms of business and generating large revenue. In order to gain these opportunities in the field of business if the entrepreneurship is rising so most of the new talent will come and slide the new products and services in the corporate world. It may lead to the growth of new opportunities and it also increases the export rate of the country which leads to finances the financial status of the country. If the import rate becomes high then this is a very difficult situation for the country and effective measures should be taken in order to decrease the imported and increased export.

Slow Economic Growth

South Africa is slightly low economic growth which leads to creating fewer job opportunities and low. It is very important for South Africa to increases and economic growth by taking crucial steps. The economic growth of South Africa is low as compared to other countries which highly impact the opportunities rate in South Africa. The economic growth is low and to enhance their revenue generation (Brewster, 2017). An export large number of products outside the country which also leads to increase the employment opportunities incorporate work of the country. There are various job opportunities outside the country and most of the youth is inspired by taking jobs in other countries rather than South Africa. Many big organisations are expanding their business in different countries as per the growth rate of the countries and this will be a disadvantage for South Africa in terms of getting employment opportunities.

Nepotism

As per the public review, nepotism is regarded as a problem at the local government level. If the person is having someone connected inside the industry or any other organisation than the chances of a job increases for that person that is one of the key factors that leads to unemployment of people in the country (Alabi & Bada, 2019). This is just a review by the people as many people also say that the talented people have all the opportunities and this comes after a long time but still there is an opportunity for the people who have skills and competencies. The problem with government is that they will give a job to a person who is connected to inside.

Factors that Lead to Reduce the Unemployment Rate

Different strategies lead to reduce the unemployment problem in the country by following two strategies such as the demand-side policies to reduce demand deficiency employment and the supply-side policies to reduce the structural unemployment.

Demand-Side Policy

The demand-side policy is a policy that is applied when there are a recession and rise in cyclical unemployment. As this is due to the after-effects of the global recession. The demand-side policies refer to the policies such as fiscal policy, monetary policy and the depreciation of exchange rate.

Fiscal Policy

This policy refers to the decrease in unemployment by adding to increase aggregate demand and the rate of economic growth (Freiling & Harima, 2019). The government need to pursue the fiscal policy that comprises of cutting taxes and enhancing government spending, decreasing taxes increases, disposal income and therefore it is too and hence conduction leading to higher aggregate demand. When there is an increase in aggregate demand then there will be an increase in real GDP.

Monetary Policy

This policy refers to involve cutting interest rates. Lower rates increase the cost of borrowing money from someone and encourage people to spend and invest. This increases the average demand and should also help to increase the GDP and decrease the demand deficient unemployment (Cooper et al., 2017). It also decreases the exchange rate and makes export more competitive. If the country is exporting a large number of product then it will grain high competitive advantage. The policies have the same problems of fiscal policy as it depends on various other components of average demand.

Supply-Side Policies for Decreasing Unemployment

Supply-side policies refer to the policies focuses on microeconomics issues. This kind of policies had some impact on the labour market and provides a good labour demand. Supply-side employment depends on various factors such as instructional, structural and classical. Qualities that lead to decrease the supply side unemployment is the education and training, to reduce the power of trade unions, employment subsidize, enhancing labour market flexibility and stricter benefit requirements. This policy leads to a decrease in unemployment on the supply side

  • Training and education strategy leads to improve the employment opportunities of any country and South Africa needs to understand the education and training important in the country (Dorband, 2016). Training and education enables to find jobs in the developing industry. Training and education are very important for any country as it enhances the corporate presence of the country as well as increase the employment opportunity.
  • The second policy needs to undertake by South Africans to reduce the power of trade unions. If the union can bargain for bridges about the market-clearing level then it is true or real wage unemployment. Therefore, a country needs to reduce the power of trade unions (Ashwarya & Alam, 2019). Trade unions not only influence the people to step on a particular wage as they also encourage them to fight against the organisation in terms of pay wages. Therefore every industry needs to reduce the power of trade unions.
  • Enhance the labour market flexibility as the labour market of South Africa is quietly low in terms of skilled labours that have good leadership skills and competence. A country needs to focus on enhancing the labour market flexibility by changing some criteria’s that enhances the employment rate in industries. Example, if a part-time job is offered by the industry than it will lead to help candidates to get prepared and get training from the big company (García Godoy, 2017). The industry should provide training programs to candidates as a part-time employee. The government should also start developer training programs in terms of skill required in the corporate world. Colleges should provide training in order to deal with the corporate trends and also to develop skills required to perform well in the organisations. Things that need to be understood by the government is to enhance the labour market flexibility in order to provide employment opportunities to the people

Employment Trends in Upcoming Years for South Africa

Jobs in upcoming years for South Africa will be as follows

  • The employment rate of South Africa is slow in motion as due to the present economic growth of a country. The economic growth of the country is low so that the unemployment rates will automatically increase. The country should focus on increasing growth by adopting various strategies to improve entrepreneurship. South Africa needs to take effective steps in terms of providing financial support and guidance to the youth who have opportunities for having different and innovative work plans. The country must be independent in terms of employment opportunities as the entrepreneurship provides support to be independent and start their own business in the country as well as outside the country (Malan, 2017). The countries that have the high growth rate are due to the entrepreneurship as most of the young talent acquired the business and earn a profit. The upcoming employment of the country is not high if the effective steps will not be taken.
  • Apart from this, the labour market trends of South Africa is quietly low because the skilled labours are required for the industries and the supplier labour is not up to the mark, therefore, the number of job seekers are increasing. The labour market demand from the company is high but the labours are not skilled which lead to an increased rate of unemployment. All the people need to focus on entrepreneurship as this is the only way through which the economic condition of the country will be stable and the employment rate will be stable. Apart from this is a South Africa will able to develop IT sector and encourages youth to be more focused on technologies and the computer systems so that the youth can invest in technology and make different equipment for industries to perform better (Jeong & Heimpold, 2017). The above finding it is clear that the upcoming employment opportunities for South Africa are high but the main step is to implement the strategies that enhance the entrepreneurship and developing plans for the country.

Recommendations on Unemployment in South Africa

  • The first steps that the country needs to take care to improve the entrepreneurship thinking of youth and make them understand the benefits of entrepreneurship. The country needs to increase the interest of youth in entrepreneurship as it is the key factor that leads to the success in economic growth as well as and deduction of unemployment (Hidayati & Faiz, 2020). The country needs to make corporate strategies that attract youth towards entrepreneurship and innovative products and services.
  • The second step that needs to be taken by country is to develop the education and training of the students. The country needs to enhance its education standards as per the present trends and demand for market labour. The country needs to improve its education system and higher the standards of education if the demand of labours will be fulfilled then the companies will hire the employees on large rates (German, Miña, Alfonso & Yang, 2018). This leads to reducing the unemployment rate in the country full stop there for the need to enhance the education system is very important. It will be done by analysing the characters in the education system and then implementing the strategies that could eradicate the issues.
  • The third step that needs to be taken by country is to add digitisation that has more job opportunities. IT sector is full of growth opportunities as it factor that will be used to create more job opportunities for job seekers. Apart from this, the country needs to focus on the gaps that faced by the industries in order to hire the employees as the supply is high but demand is quietly low (Hidayati & Faiz, 2020). These steps should be undertaken in order to eradicate the unemployment issue in South Africa.

Conclusion on Unemployment in South Africa

It is concluded from the study that the unemployment is one of the biggest issues that most of the countries are facing and even in South Africa this is one of the greatest issues that needs to be eradicated for development of the country. There are numerous reasons that lead to unemployment in South Africa. The unemployment in South Africa is not caused by low levels of economic growth but also caused due to several other reasons. The major cause of unemployment in South Africa is the education level attained by the youth which has a lack of skills and technical knowledge gained by the youth. Unemployment is one of the biggest problems which made progressively increases with decrease education level and education level of South Africa. It is not producing the skilled labour for the labour market. The great recession also impacts the trade of the country which ultimately impact the industry manufacturing units.

Supply-side policies refer to the policies focuses on microeconomics issues. This kind of policies had some impact on the labour market and provides a good labour demand. Supply-side employment depends on various factors such as instructional, structural and classical. The economic growth of the country is low so that the unemployment rates will automatically increase. The country should focus on increasing growth by adopting various strategies to improve entrepreneurship. South Africa needs to take effective steps in terms of providing financial support and guidance to the youth who have opportunities for having different and innovative work plans. The labour market trends of South Africa is quietly low because the skilled labours are required for the industries and the supplier labour is not up to the mark therefore the number of job seekers are increasing. The labour market demand from the company is high but the labours are not skilled which lead to an increased rate of unemployment.

References for Unemployment in South Africa

Alabi, N. O., & Bada, O. (2019). Investigating the Causality between Unemployment Rate, Major Monetary Policy Indicators and Domestic Output using an Augmented Var Approach: A Case of Nigeria. Global Journal of HUMAN-SOCIAL SCIENCE: E Economics19(6), 11-21.

Aishwarya, S., & Alam, M. (Eds.). (2019). Contemporary West Asia: Perspectives on Change and Continuity. London: Routledge.

Benedict, M. A., Mofolo, N., & Adefuye, A. O. (2020). The economic burden of deliberate self-poisoning: insight from a tertiary hospital in the Free State Province, South Africa. The Pan African Medical Journal36(35).

Brewster, F. (2017). African Americans and Jungian psychology: Leaving the shadows. Taylor & Francis.

Cooper, J. T., Masterson, J., Thapa, J., Nair, G., Li, W., Zahra, Q. A., ... & Tasnum, T. (2017). Waller County State of Community Report 2016.

Dorband, I. (2016). Using Revenues from Carbon Pricing to Close Infrastructure Access Gaps–Distributional Impacts on Nigerian Households.

Freiling, J., & Harima, A. (2019). On the heterogeneity of migrant and diaspora entrepreneurship. Int. J. Entrepreneurship and Innovation Management23(6), 539.

García Godoy, M. (2017). Proyecto Elite: una revisión de la literatura especializada.

German, J. D., Miña, J. K. P., Alfonso, C. M. N., & Yang, K. H. (2018, April). A study on the shortage of hospital beds in the Philippines using system dynamics. In 2018 5th International Conference on Industrial Engineering and Applications (ICIEA) (pp. 72-78). IEEE.

Hidayati, W., & Faiz, I. A. (2020). The Role of Accommodation and Food Service Industry to The Development of Tourism In Jawa-Bali. Eko-Regional: Jurnal Pembangunan Ekonomi Wilayah15(1).

Jeong, H. G., & Heimpold, G. (2017). Economic Transition in Unified Germany and Implications for Korea. KIEP Research Paper. Policy References, 17-13.

Malan, K. (2017). Critical success factors for the sustainability of family businesses in South Africa (Doctoral dissertation, University of Pretoria).

Malan, K. (2017). Critical success factors for the sustainability of family businesses in South Africa (Doctoral dissertation, University of Pretoria).

Mowers, J. L. (2017). Evaluating the South African small business policy at the local and district municipality level (Doctoral dissertation, University of Pretoria).

Sefa-Nyarko, C., & Afram, A. (2019). Gender in national history narratives in social studies textbooks for Ghana. Yesterday and Today, (21), 80-105.

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