Subject: Economics for Managers

Course: MBA Modular 2004 (1) E

Student: Tariq Jamodien

Student Number: 14479982

Lecturer: Prof. Andre Roux

Due Date: 10 July 2006


I certify the content of the assignment to be my own and original work and that all sources have been accurately reported and acknowledged, and that this document has not previously been submitted in its entirety or in part at any educational establishment.

Signature: [pic]

1. Introduction

Combating rising unemployment is undoubtedly one of the biggest challenges facing South Africa. The historical legacy of inequality has resulted in a workforce that is inappropriately skilled, with a clear bias along racial and gender lines regarding employment prospects.

The labour market appears to be constrained by legislation and inflexible conditions. Economic factors such as the decline in manufacturing, mining and agriculture are also contributing factors to the malaise.

Government has attempted to address unemployment through various methods such as Public Works Programmes, skills development and small business development. However, it is debatable whether any of these mechanisms have had any positive and sustainable effects on stemming the tide of unemployment.

The focus of this paper will be to take a broad macro-economic view of unemployment and the context within which the country is grappling with this challenge. It is not the aim to come up with any novel solutions, but rather to foster an understanding of the issues as discussed within the media and other sources.

2. The Definition of Unemployment

Barker (1999, p.165) defines an unemployed person as somebody who is without work, is currently available for work, and is seeking or wanting to work. The unemployment rate is defined as the number of unemployed persons taken as a percentage of the economically active population, which...