South Africa: Joblessness amid skills shortage

Graduate unemployment in South Africa doubled in the first decade of democracy, despite a worsening skills shortage, according to economists at the University of Cape Town. But strong economic growth appears at last to be alleviating this paradoxical problem.

Research by the Development Policy Research Unit (DPRU) in Cape Town’s school of economics found that the promises of a “good job and prosperous life” associated with higher education have eluded many of the growing number of South Africans completing tertiary education.

Unemployment among graduates grew from 6.6% in 1995 to 9.7% in 2005, wrote researchers Kalie Pauw, Morné Oosthuizen and Carlene van der Westhuizen in a DPRU working paper titled Graduate unemployment in the face of skills shortages: A labour market paradox. This translated into 36,000 jobless people with degrees and 165,000 unemployed holders of diplomas and certificates in 2005.

A policy brief published in September added that although graduate unemployment remained low relative to overall unemployment, with graduates comprising only 2.6% of the jobless, their actual unemployment increased by almost 50% between 1995 and 2005 – making it “the fastest growing unemployment rate among all education cohorts”.

But Morné Oosthuizen told University World News: “We have found in the past year that the numbers of unemployed graduates are beginning to fall. We think this is because strong, sustained economic growth has started to absorb graduates into the market faster.”

A number of factors combined post-apartheid to raise jobless rates in South Africa from 18% in 1995 to 27% in 2005 (or from 31% to 39% using the ‘broad’ definition). These included structural shifts in the economy away from primary and secondary sectors towards services or tertiary sectors, the rising cost of labour and technical progress.

In the first decade of democracy, the labour force became younger and better educated, and job creation disproportionately benefited people with tertiary education, especially degrees.

At the same time, there was rapid expansion in the number of university graduates. In 2005, according to the Cape Town economists, there were some 820,000 degree-holders in the workforce – up by 356,000 over the decade.

Yet it appears that graduates are not always employable. A survey by the DPRU of 20 of South Africa’s top companies revealed that they were not always able to use graduates to meet their skills requirements because:

 Graduates have the qualifications but not always the practical skills and experience.
 The wrong types of graduates are being produced: there are too few technical graduates.
 Frequently graduates are not suited to fill shortages at the management level.
 Skilled staff are often poached by other companies or emigrate.
 Graduates are not always of high enough quality.

Also contributing to graduate unemployment are oversupplies of graduates with diplomas or certificates rather than degrees. Also, there are too many commerce degree-holders (who account for 28% of jobless graduates) and an oversupply of black African graduates, whose numbers have grown massively and who accounted for 85% of the tertiary unemployed in 2005.

South African students, the researchers noted, keep on registering in fields where labour demands are less acute, such as social sciences and the humanities, and in fields that do not directly prepare them for professions.

Graduates are also unemployed because of the poor quality of education in South Africa at all levels and in some universities, continued racial discrimination in favour of whites, lack of ‘soft skills’ such as time management, communication and creative thinking, lack of ability to work independently, and too-high expectations.

The UCT economists suggested that South Africa tackle the weaknesses within its education system, and that companies absorb more graduates and provide them with additional training where necessary:

“While no single short-term solution will solve the problem, policies which move to increasing the quality of our education, limiting enrolment to some courses, and ‘incentivising’ companies to take up graduates...will ensure that future graduates are absorbed,” they said.