Debt Centre

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This week we at Debt Centre want to take an in-depth look at the problem of unemployment, and share some optimism options of how consumers can possibly find work or create an income, to stand up again and save them from further debt problems.

Everybody has an opinion on unemployment in the country, the root of social weaknesses to common trade and poorer living conditions. By the official latest count, 6.7-million people are unemployed in South Africa, on average it comes down to 29% of everybody who could be working.

What is the main cause of unemployment worldwide?

On a technical note it becomes a structural unemployment dilemma, when there is a long term decline in demand in an industry, which will evidently leads to fewer jobs as the need for mass labour falls away. Foreign competition or changes in the demand and supply structure of an industry due to comparative advantages, are some of the main factors that leads to large lay offs.

In South Africa

 There are various arguments about the causes of the high rate of our unemployment

  • Poor education and training due to decreased levels of accepted passing rates in schools, leads to a major lack of higher educated students.
  • Labor demand and supply mismatches due to the increasing number of yearly school leavers looking for work
  • The effects of the global recession of 2009
  • Role of trade union federations in the government with regards to wage demands
  • Lack of entrepreneurship, only 3 – 9% own or run, or intend to start their own businesses.
  • Slow economy growth due to lack of job creation by the government and private sector

The straight answer in definition

  • Unemployment is someone that lost his or her job at a time of corporate crisis or other reasons, between the age of 15 and 64, but looks for other work.
  • The expanded and negative version in definition refers to those discouraged workers who are unemployed who have stopped looking for work.

Currently, South Africa has a mass surplus of unskilled and low-skilled job seekers, arguably because of the lack of education investments and entities in the poor and rural communities, and other levels of economic sources and historic cheap labor agreements. The challenges in the general public opinion are narrowed down to four major issues, namely: Unemployment – Crime – Housing – Corruption

The perceptions of the unemployed community

 Starting up a business – a small business is one of the secondary economic boosts to help create new jobs in the private sector but, in South Africa there is a lot of crime and the new business does not survive the constant robberies and victimization of criminals.

Closure of factories – the importance of those production driven factories used to employ and train thousands of unskilled people are now gone and left those stranded and hopeless.

Lack of formal skills and experience – Companies employ those with some level of experience and those who have the diploma or degree, but no experience, get left out.

The Nepotism at government level – the practice among those with power of influence of favoring relatives or friends. If you’re not connected to someone inside who’s hiring your changes to find a job are few.

Understand the different types of unemployment

 The natural type rate – there will always be some level of unemployment, even in a healthy economy, the lowest recorded rate was at 2.5%. A normal indicator rate stands at 4.5 to 5%

The Frictional type – workers leave their jobs voluntarily but haven’t find new ones, or because they had to move away. Also when students are job hunting, or mothers returning to the workforce. Frictional unemployment is good for the economy as it allows workers to move to jobs where they could be more productive.

The structural typeit occurs when developed skills required become more than workers have, and the industry’s replacement of machine operators with robotic ones. Unless they are willing to accept a lower income level job, they may get retrenched and out of a job.

The Cyclical typethat’s when demand for goods and services falls dramatically, forcing businesses to lay off large numbers of workers to cut costs.

The long term type – those workers who could not find a job for longer than two of three years, even longer. Employers overlook someone that was out of the workforce for that long, assuming that their skills became outdated.

The real unemployment rate – many people argue that the official rate does not reflect the true numbers of the unemployed community, most of the statistics released by governments are calculated on margins with the previous year’s numbers to a graphic order

The classical type – also known as “real wage” induced unemployment. When unions negotiate or initiate a strike force to demand higher wage increases and the companies cannot comply. That and longer term demands can lead to a recession and workers get laid off.

The under-employed type – it includes those who are willing to work part-time just to earn some income, but not enough to make ends meet. Most times they are the group that got demoted or moved to a lower or half day job description, due to company retrenchment programs.

 Some insight to Why South Africa’s unemployment is so high?

 If people are not willing to invest in a country, and the elements scare them away, even it’s local investors and producers of goods loose their interest, it is almost impossible to generate new jobs.

 South Africa needs a make over story

Our economy needs to focus on the masses of school students that enter the work force every year, looking for jobs, wanting to learn, need training to get a start good and to boost their moral and inspiration to better themselves in their lives.

It also starts with you, your own drive to overcome the fear of crime and failure to succeed with your ambitions. We live now in a society where we have better access to the internet, the government has provided free WiFi services in some places.

Your courage and successes will inspire your neighbors and friends, your drive will be infectious to other unemployed workers. It takes one person to ignite passion that can light up a community that leads to unity in numbers. That’s the beginning of the make over South Africa needs, it starts with you and me!

Where to start

Let us look at what it takes to become an entrepreneur. Well one thing is for certain, you do not need a master’s degree in economics to start your own business. How do you become an entrepreneur without any money? You need to do something about your situation. You need a will to earn and become independent.

You have the potential to employ yourself if you have the knowledge in a specific industry where you can start your own business. Nothing in life comes easy and every successful business out there started with an idea, a drive, a passion and a love for something that could generate and income and become rewarding with it’s own merits.

Do you research first

 You have the drive, now decide on the type of business you want to do. Use the internet and do your research intensively. There are opportunities like direct sales of products, on site services, hand made items etc. The list is endless.

Important tip: Gather enough information and education material of how to run a small business and educate yourself everyday. It’s a non stop process to progress!

 Decide on your product or services that you want to offer the consumers. There are impressive online tools you can use to create your adverts and an easy user-friendly wed page for your business for free. Use social media to market yourself and your new venture, get people interested in your presentation online and grow from there.

Learn where to get finance, how to introduce yourself and sell your products, attract customers, learn to plan a budget, how to spend and expand, how to read your market of trade. Knowledge you will need to succeed.

Some inspiration to share

 This person lost his job at the factory, decided to borrow money and he bought potatoes. At first he planned his area of where he wanted to sell, and started to go door to door. He started small with no delivery vehicle, used a push chart and created a face to face, comfort and regular service delivery for his customers. Soon, they requested other products and more groceries.

As the demand for his deliveries grew, so did his method of transport evolved and he became a very successful business with a number of small trucks to deliver the food to the houses. He educated himself to run his accounts and money, and as he grew bigger, he could employ others to help.

There was the young school girl that could not find work after she matriculated and decided to sell sweets and fruit, displayed on a self-made stand at the gates of her old school, with permission of management. She soon became popular for her cheap prices and variety of expanding products, as the students and teachers supported her business everyday.

Later on she could afford to buy a food trailer and applied for a proper trade permit with the local government. Her creativity inspired other unemployed people and today, she is the proud owner of a food truck franchise that sells food, and support the poor community with food parcels for charity.

There are many success stories out there that we could inspire you with to get up and start something, but always remember, You are the opportunity, nothing will happen if you don’t do something and others will be effected by your creativity.

Even the most experienced worker needs to learn and keep up with the latest trend and growing economy, and the demands it requires. The access to the internet is your greatest source of knowledge, but your willingness to learn more, to better your knowledge, will always be your advantage in your life.

In Conclusion

Whether you have accounting skills, are an expert in languages and writing, have extensive knowledge of internet hosting and are good with website or online marketing, a good painter, arts and crafts, sales person or performer. The most important thing to remember is never to give up on yourself and get discourage when you cannot find work.

Message from the author: Ms Annienne Nel

In the debt counseling industry I find countless people with dire needs, with the willingness to start on their own business but have no funds. Any venture starts with the first small step, and no bank, investor or lender will consider helping if there is no active business profit that could show potential growth, to  foresee a good return on their investments.

Always do you research and know the trend of the trade, build a relationship with your bank and reap the benefits. Knowledge is your power, faith in yourself your secret weapon. To inspire those around you is most rewarding!

I wish you the best of success with what you have planned for your future, I know you’ll do the best for you and your family. Thank you for reading and I hope this will be of great help to inspire you to greatness. God bless you and your loved ones. Until next time, stay safe.

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