Zapreneur proposals for youth unemployment naledi panel

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Argues that youth unemployment in South Africa must be recognised as a manifestation of a wider poverty trap in South Africa. Proposes that strategies to expand social security, community works and …

Argues that youth unemployment in South Africa must be recognised as a manifestation of a wider poverty trap in South Africa. Proposes that strategies to expand social security, community works and asset building must be considered.

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  • 1. Proposals for Youth Unemployment Or youth unemployment as a “poverty trap”.
    Ebrahim-Khalil Hassen
    Zapreneur
    editor@zapreneur.com
    http://zapreneur.com
    Presented at the Economic Development Conference hosted by the Department of Economic Development
    30-31 May 2011
    Birchwood Conference Centre
  • 2. The “instrumental” problem with youth unemployment
    The Ticking Bomb Metaphor –Someday, somewhere in a not so distant future we could have an uprising … but already here, just small and uncoordinated.
    Economic growth – The economy will not grow and grow in a shared manner without addressing underlying reasons of why inequality exists
    Service delivery and income inequality – “Good” government outputs, poor employment, educational and income outputs
    Livelihoods difficult - Rural subsistence and/or informal employment limited in SA with spatial patterns being important
    Coordinated and integrated – Lack of basic inputs arguably not in place
  • 3. “The Poor”
    Dynamically Poor
    • Unable to break out of poverty without an intervention
    • 4. Poor at two different points in time
    • 5. Cannot withstand a shock
    Also called,
    • Structurally Poor
    • 6. Chronically poor
    • 7. Living in poverty trap
    • 8. The so-called “uneverythings”
  • “The Poor”
    Structurally Mobile
    • Fallen on hard times
    • 9. With time will
    • 10. Ability to withstand a shock
    Also called:
    • Dynamically Mobile
    • 11. Stochastic Poor
    Dynamically Poor
    • Unable to break out of poverty without an intervention
    • 12. Poor at two different points in time
    • 13. Cannot withstand a shock
    Also called,
    • Structurally Poor
    • 14. Chronically poor
    • 15. Living in poverty trap
    • 16. The so-called “uneverythings”
  • “The Poor” and youth unemployment
    If youth unemployment is temporary then:
    • Solutions should focus on “agency type interventions”
    • 17. Market based mechanisms likely to work
    • 18. Reliant on response from private sector firms
    • 19. Redistributive systems are small
    Current youth wage subsidy proposals do this
  • 20. “The Poor” and youth unemployment
    If youth unemployment is temporary then:
    • Solutions should focus on “agency type interventions”
    • 21. Market based mechanisms likely to work
    • 22. Reliant on response from private sector firms
    • 23. Redistributive systems are small
    Current youth wage subsidy proposals do this
    If youth unemployment is about poverty traps then:
    • Solutions should tackle “structural issues”
    • 24. Market based mechanism unlikely to work
    • 25. Redistributive systems needed and needs to work
    Current wage subsidy proposals do not do this
  • 26. So what to do? The policy suite
    Include youth in the social safety net (e.g. conditional grants in Latin America)
    Extend the right to work through an employment guarantee (e.g. India)
    Create asset bundle for young people (e.g. saving accounts for young children, and matched savings
    In South Africa we do not do any of this, or at scale
  • 27. Common Features
    Focused on providing “some income” to stabilise communities
    Entry and starting point with attempts to integrate and coordinate not at head office, but in the homes of the poor
    Linked into wider economic strategy, with formal or informal
  • 28. What does it mean for “Mzansi”?
    Possible candidates
    Significantly expand the Community Works Programme as a single major intervention
    Provide social grants
    to unemployed (either universal or targeted) or
    change grants from individual to household grants, like Brazil
    Longer term – create savings accounts for CSG recipient
    Understand that in “cartel country” with “import parity pricing” and “inequality” youth unemployment will remain very high.
    Can we wait for these bigger changes before we do something? Can “the something” help to make the bigger changes.