Unemployment in South Africa Causes and Solutions

South Africa has had a pervasive unemployment problem for the past forty years (Lam, Leibbrandt, amp; Mlatsheni, 2007). According to the Quarterly Labour Force Survey conducted by Stats SA (2012), of the 10.4 million South Africans within the ages of 15 and 24 years, 3.3 million (31.6%) are not in employment, education or training (NEET). The South African government realized that unemployment, inequality and poverty in South Africa are a problem and thus appointed the National Planning Commission (NPC) – chaired by the Minister of Planning, Trevor Manuel – to address these issues. Shortly after its appointment in May 2010, the NPC began working on its long term vision and strategic plan for South Africa – the National Development Plan†¦show more content†¦This burden will ultimately be financed through taxes. The pros of such a policy are that by increasing employment and the level of education, the population will become more productive, increasing ag gregate demand. The pool of tax payers will also increase as employment increases, reducing the burden on tax payers to pay for social welfare. Another major factor contributing to unemployment in South Africa is the shortage of jobs. Kraak (2013) found that even though South Africa is experiencing economic growth and is creating jobs, the rate at which jobs are being created is slower than the rate that new entrants are joining the labour market. In simple economics, when the supply of something increases we expect prices to drop resulting in a new equilibrium supply and demand for it at a lower price. This is explained graphically in Figure 1 below. Figure 1: Supply vs Demand for Labour Figure 1 shows that when the supply of labour increased, the price of labour dropped and a new equilibrium is formed at e2. In South Africa however, the price of labour does not fall as easily due to the pressure from trade unions (Banerjee, Galiani, Levinsohn, McLaren amp; Woolard, 2008). This is known as â€Å"sticky wages†. Instead, when the supply increases, the price of labour does not fall which leaves the market in disequilibrium resulting in an excess supply of labour, orShow MoreRelatedThe Issue of Xenophobia and How it Leads to Violence985 Words   |  4 Pagesfear or hatred of foreigners, has hit South Africa. I want to discuss this terrible behaviour with you today because I believe it is important that people should know about the issue of xenophobia and how it leads to violence and racism amongst the people within South Africa, as well as the effects it has on South Africa and its people as a whole. I also believe that if people are more aware of this situation, they can educate others and try finding a solution to decrease and possibly prevent theRead MoreCase Study : South Africa Essay1498 Words   |  6 PagesCase study: South Africa South Africa is an upper-middle income country with a population of 52 million people and a GDP of 312.80 billion US dollars (â€Å"Statistics South Africa | The South Africa I Know, The Home I Understand†, n.d.). The country has the second largest economy in Africa; it plays a prominent role in sub-Saharan Africa and in the continent as a whole. South Africa was hugely shaped by the apartheid legacy, a system of racial segregation that began during the colonial rule and was officiallyRead MoreA Brief Note On Unemployment And Its Impact On The Economy958 Words   |  4 PagesIntroduction Unemployment is a global issue considering its overall impact on the economy. The main purpose of the analysis is to identify and analyze the causes and effects of unemployment in the global economy and provide possible solutions for it. By definition, unemployment occurs when a person who is actively searching for employment is unable to find work. It is often used as a measure of the health of the economy. The most common measure of unemployment is the unemployment rate. II. KeyRead MoreWhat are the main causes of high unemployment in Zimbabwe? How serious a problem is it? Will land resettlement and HIV-AIDS ease or worsen the situation? Give reasons.1516 Words   |  7 PagesIntroduction: The unemployment rate is the proportion of the economically active population that is unemployed and actively looking for employment. In 1990, Zimbabwe embarked on a programme of Economic Reforms popularly known as Economic Structural Adjustment Programme (ESAP) and 1991-1992 saw one of the worst droughts. With close to 70% of the population living in the rural areas (CSO 1992) and dependent on agriculture for their livelihood, this constituted a major disaster. One result of theseRead MoreAids : A Relatively New Disease1743 Words   |  7 PagesAIDS in South Africa AIDS is a relatively new disease that emerged in the 20th century. It has spread to all parts of the world and claims millions of lives each year. One of the countries that has been impacted the most is South Africa. There are 6.1 million people living with HIV and around 370 000 new cases a year, according to the UNAIDS Global report from 2013. Though major cities like Jonesburg are vastly developed, much of the country still remains rural, which aids in the spreadRead MorePoverty Is A Global Issue1448 Words   |  6 Pagespeople, it affects people in many ways, and can be considered a constant battle. The war on poverty has been ongoing for many years not only in the United States, but also amongst various countries. A significant country dealing with poverty is South Africa, which has struggled to provide jobs, education, and social security, to its people for numerous years. Moreover, the same applies to countries like the United States. Our first impression is that the United States is not poor; however, the countryRead MoreTerrorism : An Imperative For Economic, Political And Military Solutions1321 Words   |  6 PagesTERRORISM IN AFRICA; an Imperative for Economic, Political and Military Solutions. The bombings of the United States embassies in Tanzania and Kenya were marked indicators that Africa based terrorist groups were increasing threats to the interests of democratic societies in Africa those of all freedom loving societies the world over. Our policy makers have for long treated the Middle East and Asia as the main battlegrounds in the war on terror. Those regions have been joined by Africa in theRead MoreHow Can African Nations Achieve Economic Growth? Essay1104 Words   |  5 PagesWhen one is asked to think of Africa, several ideas might pop up. A few of the things that could come to mind when thinking are unstable governments, poverty, and starving people. The concepts that were thought up belong to a world unknown to citizens of a first world or rather â€Å"developed† nation. Many of the globes not as advanced or â€Å"developing† nations find their place in Africa. These countries must improve upon basic fundamentals in order to be conside red a developing nation. For example, aRead MoreThe Effects Of Low Cost Private Schools South Africa s Educational Achievement1251 Words   |  6 PagesThe South African government has implemented many policies with the goal of increasing South Africa’s educational achievement. On aggregate, these policies have not been successful, as is illustrated by our current low level of academic achievement (OECD, 2014). This essay argues that through the proliferation of low cost private schools South Africa’s educational achievement will dramatically improve at a lower cost than the status quo. The basis of this argument is that the most efficient methodRead MoreAnalysis Of Adam Ashforths Madumo, A Man Bewitched1069 Words   |  5 PagesAdam Ashforth’s Madumo, a Man Bewitched presents a personal ethnographic account of witchcraft, religion, and culture among the Soweto people in South Africa. In the book, Ashforth recounts his adventures with his Sowetan friend, Madum o, who, after a series of misfortunes, believes he has been cursed by witchcraft and is in search of a cure. Madumo seeks the aid of both a traditional healer (inyanga) and the Zion Christian Church (ZCC), formed form the syncretism of African and evangelical beliefs