Introduction

South Africa is the most developed country on the African continent. However, its economy is on a declining trend due to increasing competition especially among other African nations, unpredictable political atmosphere, and corruption, which gives an unfair advantage to foreign investors. According to global reports, South Africa is no longer an ideal place for long-term investments or even short-term business enterprises. In addition, the failure by its government officials in maintaining major factors that direct macro-economic made entrepreneurs lose confidence in the South African economy. In fact, the judicial system is susceptible to bribery and other scandals indicating the failure of the government to cement its authority on the market sector. This paper will carry out an in-depth discussion on the relationship between unemployment and the economic status of South Africa and also remedial interventions for the predicament.

Reasons for Unemployment in South Africa

 Poverty in South Africa is on an increase due to a stagnating economy, which is unable to expand and create more job for its citizens. Mostly, the youth do not have jobs to meet their daily needs (Anand, Kothari, & Kumar, 2016). Thus, the main indicator of the labor sector is unemployment. The rate at which local work force participates in building the economy is 56%, which is a lower figure compared to other countries. On the other hand, labor absorption in the formal sector is negative and on a downward trend since early 2000s.

 Industrial and social framework policies during the apartheid regime were the root of the problem seen on the surface presently. Although it is not an excuse, the apartheid regime dug the pit for South Africa’s unemployment crisis. For instance, importation of cheap industrial substitutes instead of locally establishing firms that would easily make the items. Unnecessary importation led to uncompetitive market, which in turn affected the expansion of the economy. Not only that, the capital-intensive nature of the market discouraged expansion and development of other sectors of the economy (Anand, Kothari, & Kumar, 2016). In fact, during the apartheid era, African never participated in industrial development. Thus, they could not acquire essentials skills relevant for revival and running of the economy in times of trouble.

 South African economy only thrives in skill intensive sectors while informal sectors drag behind (Butler, A. (2017). For any economy is to grow extensively, low skilled individuals should be play their part and satisfy the market needs on found in  the informal part rather than lean only labor intensive sector.

The correlation between unemployment and a poor economy

A poor economy is vulnerable in case of a recession or inflation, an increase in the rate of unemployment leads to decrease in circulation of money. Consequently, businesses do not thrive and while industries retrench people due to continuous losses. For instance, the South African recession occurred when the gross domestic product was negative on both quarters. In other word when a recession can slow down an economy development. Moreover, South African economy has all the signals of an economy under recession. Fall in sales, unemployment are some of the recessive features that indicate a residing economy. However, in South African’s case, unemployment is the main factor that hinders the growth of the economy.

It is vital to note that state of an economy relies on job creation and development. The absence of the two signifies a declining or stagnant economy. There cannot be any growth without creation of jobs. Therefore, high unemployment rates indicate or points directly to a poor gross domestic product. A domestic product that is below the required threshold will also serve as an indicator of high levels of joblessness. Researchers proved that increase in the size labor force and productivity increment are a necessary balance if a country wants to keep the unemployment rate from going overboard.

Remedial measures against unemployment

 Currently, the rate of joblessness stands at 26.7%, in two financial year. It remained constant and refused to move (Ardington, Bärnighausen, Case, & Menendez, 2016). The country’s development plan has an aim of cutting unemployment by a 6% rate per year until 2030. The current government initiated steps to ensure the reduction. However, the vital part is not reduction but specific measures that would ensure a sustainable reduction in joblessness rate.

 The government and the private sector joined hands to create a program that would assist South Africans get employment opportunities fairly across all sectors (Ardington, Bärnighausen, Case, & Menendez, 2016). The Youth Employment service assisted corporates train and educate youths in readiness for employment opportunities. Such programs are credible as they increase the employability chances of jobseekers while at the same time empowering them to take courage.

 Secondly, the government wants to influence the demand and supply side of the job market (Ardington, Bärnighausen, Case, & Menendez, 2016). More so, the government introduced new courses relevant to the job market and credited businesses that required those skills so that the demand and supply can match and reduce unemployment in the market.

 In short, the unemployment in South Africa is an indicator of slow economic growth. The apartheid regime laid a foundation for the current crisis and propagated a never-ending crisis. However, with growth in the labor sector and increase in productivity, unemployment rate can be slowed down.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

References

 

Anand, R., Kothari, S., & Kumar, N. (2016). South Africa: labor market dynamics and inequality. International Monetary Fund.

Ardington, C., Bärnighausen, T., Case, A., & Menendez, A. (2016). Social protection and labor market outcomes of youth in South Africa. ILR Review, 69(2), 455-470.

Butler, A. (2017). Contemporary South Africa. Macmillan International Higher Education.