According to the labor market unemployment is also a catastrophe that has exposed South Africa’s biggest challenge
*South Africa is in the midst of a high-and-rising youth unemployment crisis. Only one out of every three young individuals of working age in the country is employed
*This depressing figure is manifested not just in youth’s low earning capacity and future hopes, but also in stifled corporate growth and unsustainable demand for government social services. To turn the tide, the solution will require action from a number of sectors and people. Long before Covid-19 became a reality, unemployment particularly among South African youth was a severe problem.
*Thousands of individuals, yearning for work, were forced to confront the harsh reality of unemployment. With an alarming unemployment rate of 74 percent among teenagers aged 15-24, Covid-19 only aggravated the problem. It’s critical to understand what the government is doing since, despite official intervention, things are not working. But how can we know if young employment programs are effective, especially when unemployment is caused by the economy’s structure?
The labor market changes that will be enacted
1.Despite the odds, favorable labor market trends are occurring and young entrepreneurs are one of South Africa’s best hopes for resolving the job problem. There is an increasing number of startups, particularly in the digital industry that is rapidly growing and may one day become a source of job creation.
2.Self-employment (own-account workers with own businesses, freelancers) accounts for only 10% of all jobs in South Africa, compared to around 30% in most upper-middle-income countries. A focus on young entrepreneurs would also help South Africa close its large gap.
3.Self-employment is the most important source of job creation in South Africa.
Impact on the economy of South Africa
*Measures to maintain macroeconomic stability, reinvigorate the employment market by strengthening the investment climate, and develop a better and more inclusive economy after the epidemic will improve South Africa ‘a economy.
*There’s a chance that the recovery will leave most of the country’s potential economically active people behind, especially young job searches, implying that the epidemic has irreversibly harmed the country’s long long-term development possibilities.
To create jobs, South Africa would need to address three long-standing issues in its labor market: exceptionally high unemployment rates and low levels of self-employment. The government can pursue changes to stimulate self-employment and assist the growth of micro and small businesses, in addition to passing carefully designed laws to improve the business climate and investing in the workers through better education