According to Statistics South Africa’s Labour Force Survey for the second quarter of 2023, which was issued on August 15, education is still crucial for the South African work market to achieve better results.
A post-1994 consensus has developed in South Africa that education is an effective instrument for bridging the gap between job searchers and accessible economic possibilities due to the detrimental consequences of apartheid’s “Bantu education,” which provided subpar education to the majority of population.
However, new patterns indicate that this established partnership may be going through a considerable shift, which, if ignored, could have an unanticipated and unfavourable impact on the South African work market.
In South Africa, a recurring pattern has emerged over the past few decades: those with greater education are more likely to find productive employment. But there has been a noticeable change in recent years. In South Africa, 33% of those with a basic education and 31% of those with an intermediate education were unemployed in 2000, respectively. By 2022, unemployment for those with advanced degrees had increased to 15%, while unemployment for those with basic and intermediate degrees had increased to 34% and 32%, respectively. Simply put, the unemployment rate for South Africans with advanced degrees is rising quickly, narrowing the employment gap between them and other groups.
In 2020 and 2021, there was less of a difference in the unemployment rates between South Africans with basic and intermediate education levels. When both groups’ unemployment rates increased from around 28% in about 2020 to around 33% in 2021, an unanticipated convergence occurred.
The 2008 financial crisis, widespread state capture beginning in 2009, and South Africa’s wasted chances throughout global commodity booms due to poor policies and precarious macroeconomic conditions are some of the causes of this overall increase in unemployment. In large part because to inadequate governmental measures, the impact of Covid-19 also worsened unemployment in 2020.
For advanced degrees, the problem is mostly caused by the abundance of degrees that produce skills that are out of step with the demands of a shifting South African work market and a faltering economy.
WATCH: The South African Work Market Dynamics
This change in the environment has broad repercussions and compels us to ask if advanced degrees will continue to have the same impact on employment prospects as they formerly did in the near future.
The graph’s trend, which shows that there is little difference in unemployment rates between individuals with university education and other groups, could indicate a fundamental change in how education influences South African work market outcomes.
Given the established importance of education in South Africa’s economic progress, the disengagement of highly educated South Africans also has the potential to impede the country’s long-term economic advancement. As talented individuals go for possibilities elsewhere, this also causes a brain drain, which results in wealth outflows. Additionally, the home affairs department’s capacity and administrative issues, together with a lack of incentives to attract in-demand skills, result in a modest inflow of foreign talent.
It is crucial to close the gap between education spending (such as student loans and bursaries) and economic expansion. Growing opportunities that make use of these investments enables people to contribute to economic progress, produces a vibrant labour force, and boosts tax revenue for the government.
The first quarter of 2023’s statistics underscore the gravity of the situation even more. According to Stats SA, the nation has one of the highest rates of unemployment with a 32.9% unemployment rate.
Actions required
The creation of a favorable investment climate is a key remedy. To encourage both foreign direct investment and the growth of current ventures, it is crucial to provide investor-friendly policies, simplified rules, and effective bureaucratic procedures. This approach can inject new money into the economy, encourage innovation, and open up a variety of job opportunities across industries, ensuring that education and skill development are used right away in the economic development of the nation.
The first step towards an investment-centric strategy is to address the frequent electrical outages, euphemistically referred to as “load-shedding,” which have a negative impact on the economy of the nation. This problem not only interferes with corporate operations but also deters potential investors. It is crucial to take quick action to reduce load-shedding since doing so will help to boost investor confidence and provide the favorable conditions needed for long-term economic growth.
The gap between theoretical knowledge and practical abilities can be closed through fostering collaboration between educational institutions and businesses, improving graduates’ employability. This partnership between academics and the demands of the South African work market may make sure that students have the necessary knowledge and experiences, easing and improving their transition into the workforce.
Research and development (R&D) incentives can influence a nation’s economic future. South Africa can create new employment possibilities that meet the shifting needs of a globalized economy and its labour market by fostering innovation and the formation of new sectors. With this approach to R&D, the country may become a center for cutting-edge technology and solutions, luring investments and producing top-notch jobs in booming industries.
Enhancing the support network for small and medium-sized businesses (SMEs) can benefit both job growth and economic resilience. Developing small businesses and entrepreneurs can boost regional economies, diversify the South African work market, and promote general economic stability. These companies are renowned for their capacity to quickly adjust to shifting market demands, which makes them crucial in supplying a wide variety of employment prospects.
It is impossible to overstate the importance of labor-absorbing investment and growth for South Africa. South Africa can meet the demands of a changing labour market and use education and skills to fuel its economic growth by embracing this broad approach.
Also Read: In South Africa, Schools Prioritize Educating About Environmental Challenges
