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.

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

4. Poor at two different points in time

6. Chronically poor

7. Living in poverty trap

9. With time will

12. Poor at two different points in time

14. Chronically poor

15. Living in poverty trap

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

21. Market based mechanisms likely to work

22. Reliant on response from private sector firms

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.