SIMON BROWN: Tsholo Mogotsi is chief partnership officer of the Youth Employment Service, better known perhaps as YES. Tsholo, I appreciate the time today. We received South Africa’s unemployment data out on Tuesday morning [12 November 2024]. The rate has dropped 1.4% from 33.5% to 32.1%. It’s going in the right direction but is still a crisis.
But what really stood out for me was a chart put out by Stats SA looking at youth unemployment, which is for the 15- to 34-year-olds. That stands at 45.5%, compared to 22.5% for over-34s. We have a crisis of unimaginable proportion in youth unemployment.
TSHOLO MOGOTSI: Yes, we do. And if you look at the age group 15 to 24 you see that unemployment in that group is actually 60%. So definitely unemployment in South Africa is characteristic of young people and it is because obviously they face some sort of bias in the labour market. They don’t have the experience that they need. They don’t have the qualifications sometimes, and also they don’t have the networks, and there’s quite a lot of evidence that shows that a lot of jobs are secured through networks.
So if you are young and sometimes could be the right person for the job, it’s just much more difficult for you to get into that job.
SIMON BROWN: I want to delve into some of that. I’m going to assume as well that, if you break it down by race and gender, it probably skews even worse for the black and/or female [youth].
TSHOLO MOGOTSI: Yes. So you are least likely to have a job in South Africa if you’re a black African woman and you’re young. If you look at white women, the unemployment rate for white woman is 7.7%. For black women the official unemployment rate is 38%. But if you look at young black women, it’s north of 70%.
SIMON BROWN: Terrifying numbers. You mentioned ‘no experience’, and that is the classic one. You need a job, [and they] want someone just out of university, but someone who must have experience. Is that something that YES tries to address in terms of getting some experience, even if it’s just a couple of months as an intern or something?
TSHOLO MOGOTSI: Yes. In fact YES was created exactly to address what is called the ‘experience trap’, which is that no one can give you that job until you have some experience. So someone has to take the risk to give you that first job. And so YES was created out of a partnership between business and government, where they agreed that we have to find a way to [incentivise] business owners to give young people that first job. And I think evidence shows that once you have at least one year of experience you’re significantly more likely to get another job than if you don’t have any experience at all.
So through the years we have about 1 700 companies that place about 40 000 young people a year in 12-month full-time jobs, who are paid not less than a minimum wage. Obviously, to get into that programme 100% of them coming in are unemployed, because you have to be unemployed to get into a YES programme.
But we find that within a year of coming out, 45% of them get employment and about 15% also go to some kind of entrepreneurship because there’s also evidence that shows that you’re more likely to make a goal of an entrepreneurship idea if you are yourself employed because you have access to the networks – and sometimes that salary can be just what you need to get something going.
So it’s not only about getting a job; Having a job also gives you a better chance – especially if you’re young – of being able to make a goal of being an entrepreneur.
SIMON BROWN: Absolutely. It makes perfect sense, as you say. We are talking experience there. You’ve been alluding to networks – also hugely important. Those 40 000 unemployed people who come in every year don’t have a network in the corporate business world a year, and they’re not going to be C-suite, of course not in their first year, but they’re still going to get a network of other people who are working and can help them find and further a career.
TSHOLO MOGOTSI: Correct, because when you’re in a job you interact not only with your colleagues, but also with suppliers, with customers. You are out there in the world. One of the difficulties about being unemployed is that you’re so isolated from economic activity and it’s very easy to fall into the trap of long-term unemployment. But once you’re in a job, even if the company that is hosting you for that year doesn’t end up absorbing you, you find that you are more likely to get a job elsewhere because of the fact that you had that experience and that network.
For example, in the YES programme, after the 12 months with YES, 57% who find a job find a job from a company that didn’t host them, so a totally different organisation. That is quite an interesting statistic because it shows that your one year of experience actually does make you more employable. Part of that is attributable to the fact that you’ve got a better CV and a reference letter, and part of it is attributable to the fact that you also have a network that you may have used during that year to find yourself a job.
SIMON BROWN: That 40 000 a year is a big number. It’s an absolutely giant number, but of course with the numbers that we are looking at in terms of unemployment it’s almost a drop in the ocean. Is it working? Is it chipping away? The numbers say it certainly is, but I’m almost thinking of a leverage effect. If [I’ve been one of] those 40 000, perhaps when I’m looking to employ someone I’m happier to take someone perhaps without experience, perhaps without a network, because I was once there.
TSHOLO MOGOTSI: Yes. We see it as a snowball effect. For every person that goes into the economy and gets employed, a percentage of them actually end up being not just a person employed, but someone adding value to the economy. Their skills are creating growth, they’re creating more employment.
And so for us at YES we try to empower the youth that are with us as much as possible so that they can become game-changers in the economy.
We do curate the kind of jobs that they do. We try and get them into jobs that actually make a difference for the economy, jobs that are needed in the economy, and so there’s a multiplier effect coming out of their employment. But, as you know, the economy has been static for a long time and there are actually no jobs being created. I think at some point in 2022 to 2023 we had net 150 000 jobs in total created for young people In the economy.
And so if you are adding 40 000 out of that 150 000, it’s making a huge difference. Ultimately in the long term what is going to fix unemployment is to get the economy going. There are signs that things are moving in the right direction. I think obviously employment is a bit of a lag, so investment decisions are made and then employment follows after that. But there are signs that there’s a bit of a turnaround in the economy, and so we hope that the numbers generally for unemployment are going to go down.
But there will always be a disadvantage to young people getting into the labour market. So we don’t think there will ever be a reason to remove programmes that support young people getting into the economy, even if we manage to bring the overall unemployment rate down.
SIMON BROWN: We need GDP growth at 3%, 4%, 5%. But I take your point – even with that, young people don’t have experience, they don’t have networks. That is the big stumbling block, even with a growing economy.
We’ll leave it there. Tsholo Mogotsi, chief partnership officer at the Youth Employment Service, I really appreciate the time.
Amendment to the Gazette