Young People Navigating the Labour Market Issues facing young people in accessing the labour market

Policy and Funding Environment

Government, often working with the social partners, has put in place policies to support growth and employment creation that frame a number of initiatives. These either directly speak to, or include provisions for, supporting youth to effectively transition into the labour market. These initiatives include the five Accords, such as the Youth Accord; the Industry Charters and the BBBEE Code; other legislation such as that relating to employment equity and skills development, as well as broader labour legislation; and specific programmes such as the Jobs Fund. The extent to which these initiatives have pull depend on the reliance which an industry or company may have on Government: for example, those that require Government licenses, or tenders are more likely to comply with the letter of the initiatives. However, all businesses are required to respond to this environment, and the implications of the environment in supporting youth to make the transition to employment are considered here.

1. Framing policies

   1. The New Growth Path and the National Development Plan

Employment creation is key to both the National Planning Commission’s National Development Plan (NDP) (2011) and the New Growth Path (NGP) Framework (2010), “both documents emphasise the need for a more inclusive, dynamic, diverse and equitable economy which is able to absorb labour and accelerate growth, and in doing so decrease unemployment and eradicate poverty. Moreover, both of these strategic documents recognise the interconnected nature of various socio-economic, political, and environmental factors; the need for an effective, capable state; and the importance of a collective effort from all sectors of society for achieving their visions.” (Juggling Jobs: Assessing the New Growth Path and National Development Plan Job Targets, eThekwini Municipality, May 2012).
Given the supposition argued earlier in this paper that improved youth employment opportunities are directly linked to overall employment opportunities, the successful implementation of both the NDP and the NGP is critical to improved prospects for young people in South Africa. The diagram below outlines the key job creation elements of both the NDP and the NGP:


Figure : Job creation in the NDP & NGP


Source: Juggling Jobs: Assessing the New Growth Path and National Development Plan Job Targets, eThekwini Municipality

The National Planning Commission’s Diagnostic Review (National Planning Commission, 2011) notes the large proportion of out-of-school youth who are not employed as a contributor to the widespread poverty in the country. The NPC details statistics over the period 2002 to 2010 to illustrate the high levels of youth unemployment in the country. It shows that the rates decreased markedly between 2002 and 2008, but increased after this date. The review paints a picture, which is consistent with the one provided in the previous sections of this report: it highlights the point that there are substantially higher unemployment rates for black youth. It observes that job losses after 2008 were highly concentrated among those under 30 years of age and who had not passed grade 12. The report suggests that relatively high starting salaries serve as a disincentive to employers to recruit youth.

The National Development Plan states that many developing economies are experiencing a “youth bulge”. The Plan indicates that a large economically active population can contribute to falling poverty rates, though it indicates that much depends on whether this population is activated. The changes in demography, particularly the increase in the numbers of people in the working-age cohort, can be a dividend or a burden.
The NDP highlights a number of areas in which there is a need for interventions that specifically target youth: for example, one of the key proposals that they make relates to the need to break the disincentive to hiring young, unskilled work seekers by incentivising the employment of young, unskilled work seekers. They further indicate that there is a need to support small business development and specifically that training should be provided for school leavers and unemployed youth. The NDP also states that the public sector should establish programmes run by well-trained ex-entrepreneurs who have first-hand experience of the sector; the government should incentivise the private sector through tax breaks to set up mentoring programmes; established small enterprises should be offered wage subsidies to take on apprentices and to offer youth placements. The NDP also states that there is a need to provide skills development for students currently in school with a focus on grooming an entrepreneurial attitude. This should include reviewing the curriculum with a view to encouraging entrepreneurial thinking and creating the skills necessary for start-ups. They propose that the review should consider focusing education into technical and academic streams after grade 8, and establishing vocational and technical training for students in grades 9 and 11.

2. The Accords

The Youth Accord is one of five Accords, with the others being:

• 
  Basic Education
  
• 
  Skills Development
  
• 
  Local Procurement
  
• 
  Green Economy.
  

The Youth Accord is the most recent of the Accords. It was signed on 18^th April 2013 at the Hector Peterson Memorial in Soweto by government, organised business, organised labour and community and youth formations. The elements of the Youth Employment Strategy contained in the Accord cover the following areas:

Education and Training: Improve education and training opportunities for the gap grouping between school- leaving and first employment.	Second chance matric programmes for those who did not pass or have poor results Expanding the intake of FET colleges as part of building a stronger vocational and technical skills base among young people to complement the current focus on academic training Developing a stronger roles for SETAs and other institutions to help to address the challenge faced by young people in sector and workplace programmes Expanding the target in the National Skills Accord, including for the State –owned Companies
Work exposure: Connect young people with employment opportunities; through support for job placement schemes and work readiness promotion programmes for young school leavers and provide young people with work experience.	Build on the labour centres of the Department of the Labour and the career fairs that the government has introduced. This forms part of the development of public employment services in South Africa. Private sector initiatives with employment commitments will be encouraged. All state departments should introduce a focused internship programme, aiming at employing their interns over a period of time equal to 5% of the total employment of the departments State-owned enterprise will develop placement opportunities for FET and University students who need work experience as part of completing their studies. Private sector companies will be encouraged to provide a range of work-exposure programmes, which include vacation programmes, summer internship, job shadowing as well as employment of young people in permanent jobs. Large local companies will be engaged to make firm and clear commitments. Build on successful examples elsewhere in the world of work-sharing^7 arrangements. This can ensure that part-time opportunities are made available to work-seekers to increase the number of persons with income and work experience, given that the very exposure to regular work supports and builds further employability.
Public sector measures: Increase the number of young people employed in the public sector, through coordinating and scaling up existing programmes under a ‘youth brigade’ programme.	The following should include clear youth intake targets: The Expanded Public Works Programme as well as the Community Work Programme, which should aim to absorb at least 80% of new entrants from the ranks of young people Rural development programmes, using among others the NARYSEC programme to help rebuild rural communities, assist with rural basic infrastructure such as fencing programme and road maintenance as well as addressing food security programmes. Develop a Green Brigade, focused on the Working for Water, Working for Energy, Working for Fire and other environmental programmes and road maintenance as well as expanding food security programmes Health brigades, to expand home- based care as well as health and wellness education to communities as part of the NHI, auxiliary services in health care facilities Literacy brigade, to utilize young people to expand literacy training of adults Other suitable areas of focus as identified from time to time, such as a Maintenance Brigade to undertake small, regular maintenance of assets and premises that are not currently maintained adequately or at all.
Youth target set-asides: Youth target set-asides need to be considered in particular industries, particularly new industries where young people can be drawn in large numbers and should be progressively realised.	The solar water heater installation programme, which should be made a youth focused sector, employing only young people in the core installation activities, and supporting youth cooperatives and youth – owned enterprises as providers of installation services and maintenance for solar water heating programme The rest of the green economy, where at least 60% of the labour intake should be drawn from the young people, and based on realising this target, the parties should endeavour to improve this further to 70% The infrastructure programme, where a target of at least 60% youth employment should be set for new projects and activities, together with training opportunities for young people The Business Process Services sector, which includes call centres, where a target of 80% of new employment should be explored and aimed for.
Youth entrepreneurship and youth cooperatives: Youth cooperatives and youth entrepreneurship should be promoted.	Public agencies such as Sefa, SEDA and the Job Fund will be encouraged to develop and strengthen dedicated programmes for the youth enterprises and youth co-ops. Consideration will be given to the use of the BBBEE Codes to strengthen private and public sector commitment to improve youth employment. The state can assist in a number of ways, including: Simplified registration of co-operatives and youth enterprises Technical support in enterprises development Support with demand for products, eg school nutrition programmes and procurement programmes Funding support that can complement private sector finance
Private sector measures: Work with the private sectors to expand the intake of young people, with targeted youth support and incentives approved by all constituencies.	It is important to improve private-sector youth absorption given that most sustainable new jobs are expected to be created in the private sector. Business organisations have endorsed the youth employment strategy as a practical and concrete way in which partnerships can be developed. They will undertake discussions within their structures to identify specific actions that can be taken to improve youth employment. It is agreed that specific measures will be developed by the end of March 2013 to give effect to this, with concrete commitments by the participating companies. It is agreed that such specific measures will be developed and announced by national youth month, June 2013^8.

The other four Accords also have elements which support youth employment:

Basic Education Accord	Focused on enabling the social partners to adopt historically disadvantaged schools and to support other programmes geared at systemic improvements in the basic education system. As shown above, weaknesses in basic education are major contributory factors to youth unemployment, and improvements in the education system can only assist in supporting youth to transition into employment.
National Skills Accord	The commitments in terms of this Accord can broadly be grouped into three categories: Delivery of training for artisans and other scarce skills – Commitments 1,3 and 5 Skills planning and Seta Performance – Commitments 4,6 and 7 FET Colleges and workplace learning – Commitments 2 and 8 As young people are the most likely beneficiaries of skills development initiatives, again, achievement of the targets in the Accord will have a direct effect on youth employability
Local Procurement Accord	The intention of the Accord is to stimulate the domestic economy by encouraging local procurement. It is suggested that this will lead to greater numbers of job opportunities in general, which will have a spin off effect on employment opportunities for young people. This issue was then reinforced in the youth accord, which highlights the need to support young people to initiate and develop enterprises.
Green Economy Accord	This Accord has specific targets for the training and employment of young people, specifically in relation to the manufacturing and installation of solar-water heating systems, where it is specified that at least 80% of new employees in this area will be young people.

3.