Table of Contents
Introduction.
Research questions.
Factors that lead to an increase in the unemployment rate in South Africa.
Labour demand.
Financial crisis.
Lack of interest in entrepreneurship.
Slow economic growth.
Nepotism..
Factors that lead to reduce unemployment rate.
Demand-side policy.
Fiscal policy.
Monetary policy.
Supply-side policies for decreasing unemployment
Employment trends in upcoming years for South Africa.
Recommendations.
Conclusion.
References.
This study aims to critically evaluate the research topic that is the “unemployment in South Africa”. Unemployment is one of the biggest issues that most of the countries are facing and even in South Africa, this is one of the greatest issues that need to be eradicated for the development of the country. There are numerous reasons that lead to unemployment in South Africa. The unemployment in South Africa is not caused by low levels of economic growth but also caused due to several other reasons. This study will discuss all the factors that growing unemployment and the trends over the past forty years that leads to unemployment in South Africa. This also rises on the factors that lead to unemployment but also recommend various actions that lead to eradicating the unemployment issue in South Africa (Benedict, Mofolo & Adefuye, 2020).
The unemployment in South Africa has been increased by four-point six per cent in the last ten years and which is the most concerning issue for the government of South Africa. Unemployment refers to the individual who is unemployed and seeking for job opportunities but they are not able to find a job. This issue is faced by many countries but South Africa have recently had a downfall in the rate of unemployment. There are various types of unemployment such as the demand deficient unemployment, frictional unemployment, structural unemployment, voluntary unemployment etc. The impact of unemployment will be faced by both the workers and the national economy that leads to creating a ripple effect on both of them. Sometimes unemployment may be caused due to the lack of financial crisis as due to COVID-19 there are various companies which seem to be shut down due to the financial interruption in the organisations. This study will demonstrate all the factors that lead to impact the unemployment in South Africa.
Unemployment is the major issue for South Africa as it is a global phenomenon given the sluggish world economy. The major cause of unemployment in South Africa is the education level attained by the youth which has a lack of skills and technical knowledge gained by the youth. Unemployment is one of the biggest problems which made progressively increases with decrease education level and education level of South Africa. It is not producing the skilled labour for the labour market (Malan, 2017). This is also due to the deliberate exclusion of black people from the educational system and from the school of an application under apartheid contributed to high rates of unemployment today. There are various gaps observed in the education system of South Africa. The labour market needs the employees that have acquired good leadership which needed to accomplish the predefined goals of the organisation.
The South Africa education system has a lack of standards facilities provided to the students. In terms of infrastructure, the infrastructure of the schools is not up to the mark and it will lead to impact the training and the education of the students. There is a wide difference between the black and a white person in the schools which may lead to an imbalance in the education system of South Africa. Apart from this, certain things need to be addressed by the Government of South Africa in order to eradicate the unemployment issue by providing proper education to the student and enhancing the standards for education facilities (Brewster, 2017). Apart from this, enhancing the sanitation and electricity condition are one of the major issues which pointers students to skip their schools and not focusing on education.
The demand for labour in the market is rising day by day but the number of job seekers over the years is increasing and the demand for labour for the organisation has a certain imbalance. The job seekers of South Africa include the male, as well as female and this number, is increasing day by day and the number of jobs is not available for that number of candidates (Mowers, 2017). The industries and the companies want to hire labour that is capable of handling the pressure and competition. The leadership style that helps the organisation to accomplish all the define goals needs by the industries. But the market has unskilled labour and therefore the organisation does not employ these kinds of labour and the number of job seekers is increasing over the years. However, the population of South Africa is mostly young people and a large number of people is entering into the labour market as compared to the jobs that are available in the labour market.
After the effect of 2009 and 2008 Global recession, many workers lost their jobs and this may lead to highly impact the employment rate. South Africa strongly hit by the aftershock in the firm which impacts on the real economy (Sefa-Nyarko & Afram, 2019). The great recession also impacts the trade of the country which ultimately impact the industry manufacturing units. Recession is the situation when all the countries are unable to pay to their employees and without any reason, they need to fire their employees.
Due to globalisation industrial market is rising day by day and many countries are raising entrepreneurs’ and motivate the youth to start their work and earn. However, the scenarios are different in South Africa as there is a lack of interest for entrepreneurship among the youth which leads to taking the serious opportunity in business for South Africa. Entrepreneurship is one of the key factors that lead many countries on the path of success in terms of business and generating large revenue. In order to gain these opportunities in the field of business if the entrepreneurship is rising so most of the new talent will come and slide the new products and services in the corporate world. It may lead to the growth of new opportunities and it also increases the export rate of the country which leads to finances the financial status of the country. If the import rate becomes high then this is a very difficult situation for the country and effective measures should be taken in order to decrease the imported and increased export.
South Africa is slightly low economic growth which leads to creating fewer job opportunities and low. It is very important for South Africa to increases and economic growth by taking crucial steps. The economic growth of South Africa is low as compared to other countries which highly impact the opportunities rate in South Africa. The economic growth is low and to enhance their revenue generation (Brewster, 2017). An export large number of products outside the country which also leads to increase the employment opportunities incorporate work of the country. There are various job opportunities outside the country and most of the youth is inspired by taking jobs in other countries rather than South Africa. Many big organisations are expanding their business in different countries as per the growth rate of the countries and this will be a disadvantage for South Africa in terms of getting employment opportunities.
As per the public review, nepotism is regarded as a problem at the local government level. If the person is having someone connected inside the industry or any other organisation than the chances of a job increases for that person that is one of the key factors that leads to unemployment of people in the country (Alabi & Bada, 2019). This is just a review by the people as many people also say that the talented people have all the opportunities and this comes after a long time but still there is an opportunity for the people who have skills and competencies. The problem with government is that they will give a job to a person who is connected to inside.
Different strategies lead to reduce the unemployment problem in the country by following two strategies such as the demand-side policies to reduce demand deficiency employment and the supply-side policies to reduce the structural unemployment.
The demand-side policy is a policy that is applied when there are a recession and rise in cyclical unemployment. As this is due to the after-effects of the global recession. The demand-side policies refer to the policies such as fiscal policy, monetary policy and the depreciation of exchange rate.
This policy refers to the decrease in unemployment by adding to increase aggregate demand and the rate of economic growth (Freiling & Harima, 2019). The government need to pursue the fiscal policy that comprises of cutting taxes and enhancing government spending, decreasing taxes increases, disposal income and therefore it is too and hence conduction leading to higher aggregate demand. When there is an increase in aggregate demand then there will be an increase in real GDP.
This policy refers to involve cutting interest rates. Lower rates increase the cost of borrowing money from someone and encourage people to spend and invest. This increases the average demand and should also help to increase the GDP and decrease the demand deficient unemployment (Cooper et al., 2017). It also decreases the exchange rate and makes export more competitive. If the country is exporting a large number of product then it will grain high competitive advantage. The policies have the same problems of fiscal policy as it depends on various other components of average demand.
Supply-side policies refer to the policies focuses on microeconomics issues. This kind of policies had some impact on the labour market and provides a good labour demand. Supply-side employment depends on various factors such as instructional, structural and classical. Qualities that lead to decrease the supply side unemployment is the education and training, to reduce the power of trade unions, employment subsidize, enhancing labour market flexibility and stricter benefit requirements. This policy leads to a decrease in unemployment on the supply side
Jobs in upcoming years for South Africa will be as follows
It is concluded from the study that the unemployment is one of the biggest issues that most of the countries are facing and even in South Africa this is one of the greatest issues that needs to be eradicated for development of the country. There are numerous reasons that lead to unemployment in South Africa. The unemployment in South Africa is not caused by low levels of economic growth but also caused due to several other reasons. The major cause of unemployment in South Africa is the education level attained by the youth which has a lack of skills and technical knowledge gained by the youth. Unemployment is one of the biggest problems which made progressively increases with decrease education level and education level of South Africa. It is not producing the skilled labour for the labour market. The great recession also impacts the trade of the country which ultimately impact the industry manufacturing units.
Supply-side policies refer to the policies focuses on microeconomics issues. This kind of policies had some impact on the labour market and provides a good labour demand. Supply-side employment depends on various factors such as instructional, structural and classical. The economic growth of the country is low so that the unemployment rates will automatically increase. The country should focus on increasing growth by adopting various strategies to improve entrepreneurship. South Africa needs to take effective steps in terms of providing financial support and guidance to the youth who have opportunities for having different and innovative work plans. The labour market trends of South Africa is quietly low because the skilled labours are required for the industries and the supplier labour is not up to the mark therefore the number of job seekers are increasing. The labour market demand from the company is high but the labours are not skilled which lead to an increased rate of unemployment.
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