- Artificial Intelligence (AI) is emerging as a key player in transforming South Africa’s labour market and empowering its youth population.
- Initiatives focused on AI education and skill development can equip the youth with the competencies necessary for the evolving job market.
- This ensures that they are well-prepared for the increasing integration of AI technologies across various industries.
Africa is home to the world’s youngest population, but unfortunately, 60 per cent of the continent’s unemployed are youth, as highlighted by the United Nations. This trend is mirrored in South Africa, despite the government’s efforts, such as allocating R5.2 billion in tax relief in the 2022 National Budget to spur economic recovery and encourage youth employment.
The impact of the COVID-19 pandemic has been acutely felt in South Africa’s labour market. According to Labour market dynamics in South Africa 2022 report published by Statistics South Africa, stringent containment measures resulted in a significant decrease in the absorption rate, dropping by four percentage points to 38.5 per cent between 2019 and 2020 and further declining by 1.6 percentage points between 2021 and 2022 to reach 38.6 per cent.
The unemployment rates, particularly among the youth, continue to be a cause for concern, with the official rate reaching 33.5 per cent in 2022—6.0 percentage points higher than the 2017 rate.
The labour force, comprising the employed and unemployed within the working-age population, increased from 22.3 million in 2017 to 23.4 million in 2022. Despite a decline during the COVID-19 pandemic in 2020, the labour force rebounded in 2021 and 2022. This improvement led to a 1.8 percentage point increase in the labour force participation rate, reaching 58.1 per cent in 2022.
Statistics South Africa added that between 2019 and 2021, total employment faced a decline, notably dropping by 1.3 million from 16.4 million in 2019 to 15.1 million in 2020 due to the pandemic’s impact. However, there was a positive trend in 2022 with an increase of 853,000 jobs.
Community and social services, trade, and finance remained the major contributors to total employment, accounting for 60 per cent in 2022. While employment decreased in seven out of ten occupational categories between 2017 and 2022, there were gains in professionals, sales and services, and skilled agriculture.
Women’s participation in technicians roles increased from 54.0 per cent in 2017 to 56.2 per cent in 2022. The share of formal sector employment decreased, while the informal sector saw a rise from 16.9 per cent in 2017 to 18.8 per cent in 2022.
Unemployment rates among men and women increased by 6.1 and 6.0 percentage points, respectively, during the same period. Individuals with low levels of education face disproportionately high unemployment levels. Notably, black Africans, particularly women, experience higher unemployment rates compared to other population groups, emphasizing the urgency of addressing these disparities.
Youth in South Africa’s Labour Market
The youth, aged 15–34, constitute a growing demographic within the working-age population. Despite this growth, the number of employed youth decreased by 753,000 between 2017 and 2022. Simultaneously, the ranks of the unemployed and discouraged youth swelled by 779,000 and 493,000, respectively.
Youth in the labour market face greater vulnerability compared to their adult counterparts. Between 2017 and 2022, the youth unemployment rate consistently exceeded that of adults, and their absorption and labour force participation rates were lower.
The youth tended to be employed in industries such as trade, community and services, and finance, with lower representation in utilities and mining. In terms of occupations, the youth predominantly held low-skilled and semi-skilled roles, with elementary and sales occupations contributing significantly to youth employment.
Across most of the provinces, the share of men working as own-account workers and helping without pay in a household business in total youth employment was highest in Gauteng (15,1 per cent), Limpopo (12,7 per cent) and North West (10,1 per cent) in 2022.
The highest percentage of women in vulnerable employment was recorded in Mpumalanga (15 per cent), Limpopo (12.4 per cent) and Free State (11.4 per cent) during the same period. Among men, seven out of nine provinces showed increases in the number of workers in vulnerable employment, the largest increase recorded in Gauteng (6.2 percentage points) between 2017 and 2022.
The prevalence of vulnerable employment for women increased in all the provinces except in Limpopo which recorded a decline of 0.3 of a percentage point in 2022. In most provinces the proportion of young men working as own-account workers and contributing family members was higher than that of young women except in Western Cape, Free State and Mpumalanga in 2022.
Despite improvements in the education profile of employed and unemployed youth, the data suggests that possessing a higher education level increases the likelihood of employment. In 2022, the share of employed youth with tertiary qualifications rose from 19.2 per cent in 2017 to 20.4 per cent, demonstrating the importance of higher education in securing employment.
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Youth as AI-ready workforce
Artificial Intelligence emerges as a key player in transforming South Africa’s labour market and empowering its youth.
Initiatives focused on AI education and skill development can equip the youth with the competencies necessary for the evolving job market. This ensures that they are well-prepared for the increasing integration of AI technologies across various industries.
According to an interview published by African Business on September 8, 2023, Adio-Adet Dinika, a dedicated researcher at the University of Bremen and an intern at the Distributed AI Research Institute (DAIR) said, “without proper labour protections, AI adoption can exploit African workers, increasing economic inequality. Another problem posed by AI development or job digitalisation is the creation of a reserve labour force. The adoption of digital jobs has led to a high reserve labour force that can be exploited.”
He added that ethical imperatives are needed to prevent the exploitation of African workers and to support displaced workers through transition periods. The responsibility mainly falls on African governments to swiftly engage in training programmes to prepare young people for these jobs.
AI algorithms can facilitate more efficient matching of youth skills with job opportunities. By analyzing the skills of the youth and the requirements of available positions, AI can identify suitable matches, reducing unemployment and enhancing job satisfaction.
AI can contribute to addressing educational disparities by providing personalized learning experiences. Tailored educational content and adaptive learning platforms can enhance the quality of education, leveling the playing field for youth with different educational backgrounds.
AI analytics can identify sectors with untapped potential for youth employment. By analyzing market trends and demands, AI can guide policymakers and businesses in creating targeted strategies to generate more job opportunities for the youth, particularly in emerging industries.
