South Africa: Progressive Prosperity - Tourism Is a Great Example of How to Turbocharge Employment Creation

analysis

Unemployment rates have hit historical highs. With 40% of youth unemployed (and rising), can we afford to have a bias against labour-absorbing industries? Before despondency sets in, rather focus on pursuing employment creation opportunities that are within easy reach. Tourism is a perfect example.

Employment creation is clearly possible in SA. Unemployment can be solved. The evidence? Between 2001 and 2008, there was economic growth, 2.4 million jobs were created, unemployment rates fell from 30% to 23% and about 20% of the population was pulled out of poverty.

Then there was a dramatic reversal, taking unemployment rates close to what they were when the new democratic government came to power in 1994, some 25 years ago.

Between 2008-17, the economy created almost 1.5 million jobs. This may sound like a lot. But there are at least four trends indicating SA is off-course:

The NDP employment targets would have required the creation of about 450,000 jobs annually, as compared to 141,000;

Small, growing firms were meant to be an important source of new jobs. Instead, employment in small firms stagnated, and the proportion of employees fell from 64% to 51%;

The NDP envisaged employment growth in manufacturing, even if it became...

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