Cyril Ramaphosa. Picture: REUTERS
Cyril Ramaphosa. Picture: REUTERS

President Cyril Ramaphosa was introduced to the first 100 young people to participate in the Youth Employment Scheme (YES) at its launch last week. That may be a modest number in the context of the millions of unemployed young South Africans, yet the launch was a milestone — because of the process that produced YES and also, crucially, because YES has the potential to have a real effect on youth unemployment.

That YES has at last come together is a reflection of the much-improved relationship between big business and government under the new Ramaphosa presidency. When business leaders came together in the CEO Initiative in January 2016 in the wake of Nenegate, they moved first to try to prevent ratings downgrades but soon realised they needed to start doing something about growth and jobs.

YES was one of the initiatives that emerged from that process, along with a new business-led small business fund, but while the business leaders were quick to come up with the measures and potentially the money, getting government departments on board to support the new employment initiative proved to be a longer and tougher process.

SA pretty much leads the world when it comes to youth unemployment, with latest figures showing the rate is running at more than 51%, with the rate closer to 60% for young women, most of them black.

Now, at last, the government, labour and community stakeholders are in, so that YES is, importantly, a collaborative effort to tackle the sky-high youth unemployment that is SA’s most serious challenge. In practical terms, that means YES will be able to leverage the employment tax incentive scheme (which started out as the youth wage subsidy). It has also, the Sunday Times reports, been agreed that companies that spend at least 1.5% of net profit on employing young interns can jump a level on the black economic empowerment (BEE) scorecard.

This is a significant step forward in the new administration’s approach to BEE, shifting some of the focus of empowerment to job creation, particularly for young people.

There can hardly be a more important priority for SA now. SA pretty much leads the world when it comes to youth unemployment, with latest figures showing the rate is running at more than 51%, with the rate closer to 60% for young women, most of them black. Estimates are that just under a third of 15-to 24-year-olds are "NEET"— not in employment, education or training. That’s a recipe for social dysfunction and political unrest as well as for a cycle of poverty and inequality. And even more concerning is that about 60% of young unemployed people have never worked, making them more unemployable with each passing year.

Getting those young people into the workplace, even for a year, so they can get CVs and references and build networks is crucial to give them a chance of getting jobs — the research shows a year of experience coupled with a CV and reference letter increases their chances of finding a job by three times, and that is what YES aims to do. Its target is 1-million young people over the next three years.

Larger companies can take on one-year interns themselves, or can fund small or even micro enterprises in townships or rural areas, to take on young interns, so boosting the small, medium and micro-sized enterprises, which in most countries are major job creators as well as growing local economies. Investec, Sasol, Absa, Unilever and Netcare have come forward to provide work experience for the first 100 participants. The scheme seeks to "de-risk" young people, says YES, as well as to make employers more likely to hire them now and in future.

If the scheme works as planned, its effect on the young people and the companies could be significant. No doubt there will still be some big hurdles and plenty of implementation risks involved — and even 1-million is hardly the solution to youth unemployment on its own. For that, SA needs to turn around its whole education system and tackle structural barriers that prevent poor youngsters from accessing the labour market. It needs, too, to grow a lot faster.

So YES is just a start, which adds to other impressive public-private partnerships such as the Harambee Youth Employment Accelerator, and which must be complemented by other structural measures. But as Ramaphosa put it when he addressed the launch, YES "provides a vital ingredient that has been missing — the provision of meaningful work experience for young people on a scale that will have a significant and lasting impact on employment, on the economy and on broader society".

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