1. BUSA PRESENTATION TO THE PORTFOLIO COMMITTEE ON LABOUR: 2 JUNE 2006 YOUTH UNEMPLOYMENT

2. General context of unemployment in the country Number of Youths coming out of the School system Challenges of the Education System and Youth Readiness for Work The Learnership System Business initiatives to create readiness for work Alternative employment strategies

3. Unemployment levels are generally high in the country (+30%-40% of economically active people) Youth are usually included in the total figure and often difficult to isolate because of age differentials. Youth also faced with the challenge of Work Readiness in terms of qualifications and skills. Whilst the economy is growing, there are still challenges with regard to job growth. The economy is creating insufficient jobs to meet the needs of all job seekers. There needs to be a good balance between economic growth and job growth. General Context of Unemployment in the Country

4. Economic growth varies across various sectors as a result there cannot be massive employment growth. Growth sectors often carry the burden of other non performing sectors by being pressurized to employ more people. Low or non-existent basic infrastructure investment by the State stifles both economic and employment growth. Economic growth attracts the use of technology and creates a demand highly skilled employees for some part of the economic sectors.

5. Number of Youth Coming out of the School System Less than 50% of 1million children who start at Grade 1 register for Grade 12.(Average: 2000 – 2005) The rest are drop outs with poor basic education and are expected to be absorbed by the labour market. More than 50% of Grade 12 learners leave school without basic skills to seek work. More than 300 000 learners leave school at Grade 9. There is an estimated figure of between 6 000 and 7 000 unemployed graduates.

6. Youth Readiness for Work Commerce and industry faced with the burden of providing basic education for people with qualifications lower than Grade 12. Employers still have to train and skill those who have passed Grade 12. Some of the unemployed graduates need to be retrained in order for them to get meaningful jobs. The restructuring of the Further Education and Training Colleges without transitional measures has increased the pool of youth who are not ready for work. Business has to carry the burden of basic education training and then employing all these people.

7. Learnerships: A Measure of Creating Work Preparedness Learnerships are a necessary measure but do not necessarily guarantee jobs. The GDS agreement assisted in raising the plight of the unemployed because at least 109 000 people have been trained. At least 45% of these people have acquired sustainable jobs. The learnership system needs to be reviewed carefully in order to gain the credibility and status of the old apprenticeship system. There is also a backlog in the training of existing full time employees. The proposed BBBEE codes are going to increase the challenges faced by employers on training expenditure on the HDSAs.

8. Business Initiatives to Create Readiness for Work The various industry sectors are engaged in a variety of programmes to get the youth to appropriate work readiness levels. The Financial and Mining Sectors can be quoted as examples: Letsema and Thusanani Projects in Banking and Financial Sectors Graduate development project in Mining

9. Business Initiatives to Create Readiness for Work Business support of the ASGISA Initiative through participation at JIPSA Opening up Private Sector training institutions with strong government funding. (Mining industry already committing to train +800 people per year in various artisan programmes if funding is made available) Creation of opportunities for mentoring new entrants.

10. Alternative Employment There is a need to change the expectation that big business will absorb all young people coming out of the education system including those who are well skilled and qualified. Through the BBBEE business is willing to support young SMMEs to broaden the base and encourage entrepreneurship. The labour market system needs to be more flexible and allow business, particularly SMMEs, to have flexibility to respond quickly to changing market conditions.

11. THANK YOU