During August 2019, Statistics South Africa (Stats SA) has released the latest unemployment numbers for South Africa and they make for some sad reading (latest unemployment numbers for Q3 can be found here). According to the country’s number crunchers, 29,0% of South Africans who are of working age are unemployed.

To put this into perspective, that is an increase of 1,4% from the first quarter of 2019. That’s 6,7 million South Africans of working age (15 to 64 year olds) out of a total pool of 38,4 million people of working age in South Africa.

According to Stats SA’s mid-2018 population estimates, the country has a population of 57,73 million people. Now to further make you understand how serious this problem is, let’s look at the USA with an population of 327 million people. It has 6 million people unemployed out of that 300 million plus population.

A decade of rising unemployment

What is also interesting is if you look back ten years, the unemployment rate in South Africa has never dropped below 20% and has been stubbornly increasing.

As you can imagine, every time the unemployment statistics are released in South Africa, all media pundits have been offering their opinions on why the unemployment rate increased, and interestingly, their opinions on how we can solve the unemployment problem in South Africa.

South Africa’s unemployment rate increased by 1,4 percentage points to 29,0% in Q2 of 2019. The highest unemployment rate since Q1 of 2008. Source: Statistics South Africa

Two key themes are repeated (although there are others, but these two caught my attention) across all media as a solution to South Africa’s unemployment problem: youth entrepreneurship and everyone’s favourite new buzzword, 4IR (the 4th Industrial Revolution).

Can youth-run businesses and the 4th Industrial Revolution help?

Listening to, and reading everything, where youth entrepreneurship (youth in South Africa means 16 to 35 year olds) and teaching people “4IR skills” as solutions to unemployment, I couldn’t find or hear any of the people presenting this argument putting any data forward as proof or in support of their argument.

So, naturally, I decided to do what one should do, I read the Stats SA unemployment presentation and the data they presented.

Labour market rates vary significantly depending on education level. Source: Statistics South Africa.

Barely a few minutes into reading the Stats SA Q2 unemployment presentation, right there in front of me, is a chart that seemed to both highlight the problem and point us to the solution.

According to Stats SA data, firstly, 34,5% of those unemployed (who are actively seeking work) did not finish high school. This is followed by 29,4% of those who are unemployed who only have no other qualification except a high school qualification. To prove that education is where we should be possibly focussing to address the problem, only 9,1% of those that are unemployed are tertiary education graduates.

Education is the key to solving unemployment in South Africa

To me, it is quite clear, if we are to make the most impact in addressing the unemployment problem in South Africa, we should be doing everything we can to firstly ensure all children finish high school. Secondly, try as much as possible to get them post high school qualifications.

By just doing these two things, based on the available data, we would have at least made them employable, which means they can be useful to the economy.

Yes, of course, that does not guarantee employment but I can almost guarantee that most will be employed compared to them not having completed high school.

What about 4IR skills?

I intentionally mentioned the USA earlier.

I find it curious that in South Africa, and Africa at large, youth entrepreneurship and “4IR skills” (supported by the creation of technology hubs) are punted as the solution to unemployment. However, look at the USA, a country with many more people but a lower unemployment rate, in fact, it could be any Western country.

Is it youth entrepreneurship that is creating jobs?

Is it “4IR skills” acquired through tech and innovation hubs?

Or is it a well structured education system with relatively sufficient resources that is producing employable youth that is helping keep unemployment low?

I don’t know, maybe I am looking at this all wrong but something doesn’t sound right when the data is explicit that many of the unemployed did not even complete high school and you suggest that youth entrepreneurs will create jobs.

Which people are they going to hire?

The same underqualified ones?

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