The latest Quarterly Labour Force Survey results suggest that the number of employed young people has increased for two consecutive quarters. While these numbers are the highest they have been in the past two years, this slight bounce-back is cause for very cautious optimism. Employment remains considerably lower than pre-lockdown.
Young people’s employment journeys are often characterised by the term resilience — a term that has itself come under recent scrutiny. Resilience alone will not get us through these multiple, overlapping crises.
But what if resilience were a map — a pointer of sorts and a source of clues on what initiatives, ideas and communities we need to invest in and support to accelerate our economic recovery?
Analysis by Harambee Youth Employment Accelerator reveals that very few sectors, if any, have been able to return to pre-pandemic levels of employment, and certainly not to the levels seen before the 2008 economic crisis.
Furthermore, the economic recovery continues to favour contract jobs over permanent employment as companies hedge against further uncertainty.
Now, more than ever, we need to focus on resilience — not just celebrating the endurance of crises alone, but rather focusing on aspects of the labour market that will enable us to collectively bounce back.
Harambee’s research suggests that youth themselves offer us clues as to where resilience occurs, but importantly, where we need to invest and support.
Youth have demonstrated resilience time and time again with their approach to earning resilient incomes through hustling.
The labour market also points to those resilient sectors that, despite the pandemic, can be a case for investment and scale. And finally, there are hidden clues everywhere to help us identify enablers of resilience that can nudge us towards recovery and beyond.
With intentional focus, coordinated investment and targeted attention, we can build on these clues, enabling us to bounce back into sustained, inclusive economic recovery.
Take the informal economy, for example. There are around 1.2 million young micro-entrepreneurs in the informal sector. The pandemic and the economic downturn forced young people into hustling to earn money.
This is not always to be celebrated, as hustling is often precarious and volatile.
But, in addition to providing precious resources to young people in the face of a contracting economy, hustling serves as a pointer to opportunities where there are unmet needs in the economy.
Take young micro-entrepreneurs like Sisabongile Maseti (who mostly work in urban areas and start hustling because they were unable to find a job or they saw an opportunity in the market). Maseti works in Buffalo City and works at Jumbo Warehouse full-time. She does windscreen repairs on weekends and when she has her day off from work.
She charges R250 per chip and is certain that, with the right support, she could make a living from doing repairs. However, doing repairs alone may not be a sustainable business.
But if we looked at Maseti’s initiative and helped make it easier for her to earn more money sustainably, she could earn a flexible income while working a day job, eventually gaining the skills and income to support her long-term career goals.
And yet, there remain a range of entry barriers that prevent would-be entrepreneurs from entering the micro-enterprise sector. These include a lack of suitable premises or equipment and the perception that customers would be few and far between.
Young people also feel insufficiently encouraged by friends, family or community members — hustling is often still judged critically and looked down upon.
If we really understood and supported young people to earn an income to stay afloat; if we truly invested in them and supported them, these incomes could become more consistent and less volatile.
And what about resilient sectors? In early 2022, nearly a quarter of a million young people re-entered the labour market — the biggest uptick since the start of the pandemic.
While the biggest gains were in community, social and personal services — perhaps due to the Presidential Youth Employment Stimulus — there seems to be hope in other sectors.
Take, for example, the financial intermediation, insurance, real estate and business services sector. This sector is the closest to returning to pre-pandemic employment levels, despite temporary losses — suggesting that the sector holds promise.
During and despite the pandemic, the South African global business services (GBS) sector created more than 50,000 cumulative new jobs with key investments from international companies like Amazon, Webhelp and TransUnion.
Globally, the impact sourcing market is around 350,000 FTEs and is predicted to increase. Could this be the next “shop floor” — with the potential to absorb large numbers of young people into the workforce of the future, as the manufacturing boom did in Asia? We certainly think so.
A report by McKinsey suggests that cumulative jobs in the South African GBS sector could reach as many as 775,000 by 2030.
This sector is evidence of real resilience, even in the face of the pandemic. If we look to specific sectors as examples of resilience, we could indeed find the clues that will help us bounce back to economic recovery.
And finally, it is clear that enablers of resilience can amplify these small gains. Small, micro and medium enterprises (SMMEs) contribute a third of South Africa’s GDP, but are hardest hit and most vulnerable to shocks like the pandemic and financial crises.
Before the pandemic, employment in the SMME sector grew by 1,800 jobs per day (CDE 2021). It is a well-known fact that SMMEs can be the growth engine that will accelerate economic recovery, especially in emerging markets.
By cutting red tape, and by adapting our existing incentives and tax regimes to suit smaller businesses, we can drive SMME growth.
Unlike the rest of the continent, South Africa’s heavily regulated environment supports the expansion of formal businesses. These often lean into niches in the economy that would otherwise have been taken up by informal firms.
Instead of forcing informal firms to formalise to take advantage of this environment, we need to provide them with tiered options — a “menu” of sorts, with elements of formality suited to their various stages of development.
If we reduce barriers to participation in programmes such as the Youth Employment Service, we could allow SMMEs to access much-needed human capital for growth.
By simplifying business registration, as the Black Business Council suggests — with mobile trucks in townships and villages to roll out tax, company and employee registration services — we could simplify access to existing benefits, but also generate short term employment opportunities for young people.
Further, if we penalised late payments from big corporates to SMMEs — and in turn rewarded early payments — this could have a huge impact on the cash flow of small businesses.
Support for our young hustlers could also be simpler and easier to access.
A study conducted by Harambee reveals that only 2% of participants said they had received support from the government or municipality, even though 15% had applied.
Making existing support — that is already budgeted for — more visible and accessible can help our young people step onto the entrepreneurial ladder and use their latent resilience and drive to power an economic recovery.
This Youth Month, let’s not use the word resilience to simply celebrate endurance. Let us rather investigate the spaces where resilience occurs — and increase our support of these initiatives, sectors and enablers — so that resilience itself can bounce us out of the unemployment crisis. BM/DM
Source: https://www.dailymaverick.co.za/opinionista/2022-06-07-resilience-is-a-map-and-it-offers-clues-on-how-to-rebuild-our-economy/. Published 8 June 2022.