"First and foremost, we must make people employable" says Tshepo Phakathi


see money differently


Home / opinion pieces  / "First and foremost, we must make people employable" says Tshepo Phakathi

"First and foremost, we must make people employable" says Tshepo Phakathi

To participate in the labour market, individuals need at-least one or more of education, skills and/ or experience.

Education must be uniform, scaled, meet national standards and produce literate and numerate individuals. Clearly, this is a longer-term solution that requires a more strengthened Government, which discussion is beyond the scope of this proposal.

Skills and experience however, are within the capable clasps of industry. Business should consider investing in the development of tradable skills for unemployed individuals. International best practice in OECD countries recommends that individuals receive institution-based instruction and then a work-based apprenticeship to put their knowledge into practice. This way, individuals can quickly acquire skills and experience to make them moreemployable.

One way of doing this in South Africa is to facilitate the linkage of such unemployed individuals to Townshipbased informal artisan businesses. Such as, motor mechanics, panel-beating, welding, plumbing, electrical, carpentry businesses etc. The informal businesses can be incentivised to formalise and provide experiential learning to such unemployed people.

On a 12-month program, 100 000 such businesses, in say 10 different disciplines, can each employ at-least 10 structurally unemployed people in return for an incentive. This immediately creates 1 million jobs. As for the incentive; the businesses can be granted a one-off 2 500 formalization incentive for each employee enrolled (this will cover costs of business registration, tax registration, opening bank accounts, etc). These businesses will then beassisted with applying for normal Public Sector incentives such as the Employment Tax Incentive.

Undoubtedly, when fully implemented this intervention would have achieved two key goals. Firstly, knowledge capital will be raised dramatically as a million individuals will possess the tradable skills necessarily for labour force participation. Secondly, 1 million skilled or semi-skilled workers can cause between 1.3% - 1.5% GDP growth. This way, we can achieve job-led economic growth, which would be a welcome departure to the flavour of the last 10 years.