BUSA PRESENTATION TO THE PORTFOLIO COMMITTEE ON LABOUR: 2 JUNE 2006

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BUSA PRESENTATION TO THE PORTFOLIO COMMITTEE ON
LABOUR 2 JUNE 2006

YOUTH UNEMPLOYMENT
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YOUTH UNEMPLOYMENT

• General context of unemployment in the country
• Number of Youths coming out of the School system
• Challenges of the Education System and Youth
  Readiness for Work
• The Learnership System
• Business initiatives to create readiness for work
• Alternative employment strategies

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General Context of Unemployment in the Country

• Unemployment levels are generally high in the
  country (30-40 of economically active people)
• Youth are usually included in the total figure
  and often difficult to isolate because of age
  differentials.
• Youth also faced with the challenge of Work
  Readiness in terms of qualifications and skills.
• Whilst the economy is growing, there are still
  challenges with regard to job growth. The economy
  is creating insufficient jobs to meet the needs
  of all job seekers.
• There needs to be a good balance between economic
  growth and job growth.

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General Context of Unemployment in the Country

• Economic growth varies across various sectors as
  a result there cannot be massive employment
  growth.
• Growth sectors often carry the burden of other
  non performing sectors by being pressurized to
  employ more people.
• Low or non-existent basic infrastructure
  investment by the State stifles both economic and
  employment growth.
• Economic growth attracts the use of technology
  and creates a demand highly skilled employees for
  some part of the economic sectors.

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Number of Youth Coming out of the School System

• Less than 50 of 1million children who start at
  Grade 1 register for Grade 12.(Average 2000
  2005)
• The rest are drop outs with poor basic education
  and are expected to be absorbed by the labour
  market.
• More than 50 of Grade 12 learners leave school
  without basic skills to seek work.
• More than 300 000 learners leave school at Grade
  9.
• There is an estimated figure of between 6 000 and
  
• 7 000 unemployed graduates.

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Youth Readiness for Work

• Commerce and industry faced with the burden of
  providing basic education for people with
  qualifications lower than Grade 12.
• Employers still have to train and skill those who
  have passed Grade 12.
• Some of the unemployed graduates need to be
  retrained in order for them to get meaningful
  jobs.
• The restructuring of the Further Education and
  Training Colleges without transitional measures
  has increased the pool of youth who are not ready
  for work.
• Business has to carry the burden of basic
  education training and then employing all these
  people.

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Learnerships A Measure of Creating Work
Preparedness

• Learnerships are a necessary measure but do not
  necessarily guarantee jobs.
• The GDS agreement assisted in raising the plight
  of the unemployed because at least 109 000 people
  have been trained.
• At least 45 of these people have acquired
  sustainable jobs.
• The learnership system needs to be reviewed
  carefully in order to gain the credibility and
  status of the old apprenticeship system.
• There is also a backlog in the training of
  existing full time employees.
• The proposed BBBEE codes are going to increase
  the challenges faced by employers on training
  expenditure on the HDSAs.

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Business Initiatives to Create Readiness for Work

• The various industry sectors are engaged in a
  variety of programmes to get the youth to
  appropriate work readiness levels.
• The Financial and Mining Sectors can be quoted as
  examples
• Letsema and Thusanani Projects in Banking and
  Financial Sectors
• Graduate development project in Mining

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Business Initiatives to Create Readiness for Work

• Business support of the ASGISA Initiative through
  participation at JIPSA
• Opening up Private Sector training institutions
  with strong government funding. (Mining industry
  already committing to train 800 people per year
  in various artisan programmes if funding is made
  available)
• Creation of opportunities for mentoring new
  entrants.

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Alternative Employment

• There is a need to change the expectation that
  big business will absorb all young people coming
  out of the education system including those who
  are well skilled and qualified.
• Through the BBBEE business is willing to support
  young SMMEs to broaden the base and encourage
  entrepreneurship.
• The labour market system needs to be more
  flexible and allow business, particularly SMMEs,
  to have flexibility to respond quickly to
  changing market conditions.

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THANK YOU