62. 4% of under 24s Jobless: Experts call for urgent reform

IOL News

2 days ago

The very idea that youths born after the dawn of democracy in 1994 are referred to as 'born frees' must surely feel like a cruel joke to those facing one closed door after another while trying to make something of their lives.
The facts become even more sobering at the lower end of this age group, with a staggering unemployment rate of 62.4% listed for those aged under 24.
Unemployment among those aged between 15 and 34, who make up almost half of the country's working age population, surged to 46.1% in the first quarter of 2025 , Statistics South Africa recently reported. This was up from 44.6% in the previous quarter.
South Africa's younger citizens had little to celebrate this Youth Month.
'When fewer individuals are contributing to tax revenue, there is further strain on the fiscus,' she added.
'This diverts much-needed funding for enhancing the potential growth of the economy through infrastructure spending or for delivering on social services to maintain the overall standard of living for millions,' Packirisami told IOL.
According to Sanish Packirisami, an economist at Momentum Investments, the most significant cost to the economy associated with unemployment is the strain that it puts on the fiscus, which must support an expanded social welfare programme .
Youth unemployment is also incredibly costly to the economy.
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Social grants, necessitated by widespread unemployment, are a drain on the fiscus.
South Africa's social welfare programme is believed to cost the Treasury around R285 billion per year. This funding includes the R370-per-month Social Relief of Distress grant that many unemployed youths apply for.
Youth unemployment isn't simply a loss of productivity, it's also a loss of potential, says Dr Thabo Mashongoane, CEO of the Mining Qualifications Authority.
'Every unemployed young person represents a stalled contribution to GDP, a missed innovation, and in many cases, a future cost to the public through welfare or social assistance,' Mashongoane told IOL.
Role of the informal sector
While youth unemployment remains one of the most pressing challenges in South Africa, it is mitigated, to a degree, by the informal sector, says Maarten Ackerman, Chief Economist at Citadel. However, this situation also brings a set of unique challenges.
'While the informal economy is thriving and provides many youth with opportunities to earn a living, the downside is that these individuals lack access to formal financial services,' Ackerman said.
'For instance, without a payslip, it's much harder to qualify for a loan to buy a home or a car. This exclusion creates a significant gap in the economy.'
Youth unemployment brings an economic as well as a human toll.
Given that joblessness in South Africa is more prevalent across lower-income earning groups, it can fuel social unrest and crime, which damages the very fabric of society, Packirisami adds.
An often unspoken aspect of the youth unemployment crisis is mental health.
'Poor mental health, substance abuse, limited digital access and gender-based barriers also create a divide for the unemployed,' Packirisami explained.
'More government support for those affected by poor mental health and substance abuse is necessary to provide a healthier workforce in SA.'
Better support for women facing caregiving burdens was also needed to encourage female labour force participation in the economy, Packirisami added.
What are the potential solutions to youth unemployment in South Africa?
Addressing the youth unemployment crisis in South Africa will require a multi-pronged approach.
At the very least, government needs to address the poor quality of basic education, which leaves gaps in literacy and numeracy, Packirisami said, leaving the workforce ill-equipped when it comes to foundational job-specific skills.
'Government needs to encourage more students to enter Technical and Vocational Education and Training (TVET) to provide practical skills, but these TVET colleges often suffer from underfunding, outdated curricula, and social stigma, as they are viewed as second-best options,' Packirisami added.
A telling statistic is that 72% of the 'multidimensionally' poor youth in the former homeland areas of South Africa lack adequate education, according to the most recent Youth Multidimensional Poverty Index. People in these areas, deprived of essential infrastructure and services during the apartheid era, continue to suffer from widespread poverty.
Addressing the skills mismatch
Educational opportunities that are created also need to align with demand patterns in the economy, says Nkosinathi Mahlangu, Youth Employment Portfolio Head at Momentum Group.
'Alignment between institutions of higher learning and the economic drivers is key to getting young people to acquire skills that are in demand, instead of graduating or pursuing courses that will not result in employment.'
Critical and scarce skills should also be listed and tracked, in order to steer the youth into careers that will help turn the tide, Mahlangu added.
'Skills that are imported need to be part of a knowledge transfer and upskilling plan that will subsequently give South Africans a chance to fill those roles in the medium to long term.'