Skills shortage but graduates struggle to find work

PhDs and other post-graduates struggle to find work.  But, they say, there’s a skills shortage in South Africa.  

This compares with my job hunting experience of "hundreds of highly qualified people applying".

I've been unable to find credible evidence of the shortage, except anecdotal. Cape Chamber of Commerce, Wesgro and Western Cape’s department of economic opportunities – a ministry of hot air, if ever there was one – predicted dire consequences and those skills must be imported to avert economic disaster.  However, none replied when I asked for evidence.

In June the University of Pretoria’s Dr Amaleya Goneos-Malka published a study that showed PhDs – post-graduates in all disciplines really – faced 'grim job prospects'.  Employers deemed them overqualified, earned too much and frustrated in jobs beneath them. (Financial Mail: 'Why bother forging a PhD?')

Stats SA's quarterly labour surveys do not list employment/unemployment by skill, except in broad terms.  Their survey does not answer the question.  However, the Department of Labour collects data of those applying for Uif benefits – occupation, education, industrial sector, salary and demographic data – and one can derive an accurate measure of employment/unemployment for any category Labours collects data on.  

There is also the elephant in the room: politics and race – affirmative action and quotas.  There are reports of, in the public sector especially, posts being filled by poorly qualified, perhaps politically-connected people, while skilled applicants of the "wrong" race are overlooked, or posts not filled until affirmative action candidates comes along (I've experienced this).  

Does the country really have a skills shortage – does it not simply mean: "shortage of qualified black people"?

I put these questions to a business analyst and Cape Argus columnist Gavin Chait.  He replied the country has sufficient skills to meet the demand of the existing economy, but not the economy – level of economic development – needed to address the country’s 40% unemployment. 

He said if we compare South Africa ($6 000 per capita) to developed countries with similar populations, for example, Italy ($35 000) and South Korea ($27 000), we would need to grow five times – five times more engineers, managers, etc than we have at the moment.

However, it’s misleading to compare ourselves with developed countries and their middle-class, educated and productive societies.  South Africa’s poor – 50% of the population – do not pay taxes and are beneficiaries of social grants (17 million people, a third of the population), consuming 4% of GDP.  This excludes other welfare benefits like free housing and basic water and electricity. 

Because of historical, social and political reasons, including mediocre education and service delivery under ANC governance, the poor, 20 years after democracy, are not productive members of the economy – they are net recipients.  (They do buy goods and pay VAT on it but that is redistribution of state revenue derived from six million taxpayers, money already in the economy, and diverted from economic infrastructure investment). 

I’m not saying it’s their fault, and by developing the economy they would become economically productive.  But to make a more appropriate comparison, we should compare South Africa to Ukraine, Algeria, Kenya or similar.

However, in reply, I agreed with him that at our current level of economic growth – average 3% since 1994 and 1.4% recent and forecast, which is way below the 6%-plus for job creation – and high real unemployment of about 36%, that skills available is adequate.

With businesses and investors looking elsewhere because of an unattractive and antagonistic investment environment as the ANC government pursues its often confusing political and socialist-driven agenda, why would industrial development happen – manufacturing as a percentage of GDP at the lowest point at 13%. Surely, over the past 20 years, industrial development, job creation, and the demand for skills it pulls with it, has not happened in this environment.

But that is not what business and politicians are saying.  They are saying that despite the poor and uncertain economic, social, political and industrial conditions now and yesterday, a skills shortage exists and has existed - they are having "sleepless nights" filling vacancies.  

Which skills, which industrial sectors, and how this occurs in low and jobless growth, they never say.

If our economy expands at double digits we would need more engineers, accountants etc.  Or would we?  I think – and I say this without the evidence I'm seeking – we have spare capacity now, e.g. construction sector, the driver of infrastructure.

I've heard about this shortage all my working life.  What is business doing about the alleged shortage?  Of late they abandoned the notion they can do something about it, leaving it instead to universities and colleges, and then complain graduates are ill-equipped for the workplace.  

Chait said he will deal with these questions in a future column.  He may oblige where Wesgro, an agency funded by the taxpayer and responsible to "citizens of the province", failed.  (See his article here.)

See post: 'We are not innovating in skills development' (October 20)