The matric class of 2015 is facing the stark reality that fewer than four in every 10 matriculants are going to get jobs, according to Neil Roets, CEO of debt management firm Debt Rescue.
This means close to 500,000 youths will be joining the ranks of the unemployed this year and mostly candidates with decent symbols and desirable subjects such as maths, science and accounting stand a real chance of getting employed early in the year, Fin24 reported.
According to the Department of Education, a total of 801,688 pupils were registered for the National Senior Certificate (NSC) examination. This includes full-time and part-time candidates. The NSC results will be announced on 5 January 2016 by the minister of basic education and results will be released to candidates by schools on 6 January 2016.
Roets said a typical scenario is that a matriculant might get a low-paying job at a fast food outlet or something similar. “Lured by the multitude of loans made available by financial institutions and retail outlets – many of whom do not do an adequate affordability check – they borrow to the point where they become over-indebted and unable to service their debt,” he warned. “In the last five years we have seen a steady increase in the number of young people who have joined the ranks of the unemployed and this year is not going to be any different. If we take into account the number of workers who have given up looking for a job, the actual unemployment figure is probably closer to 40% than the official 25.5%.”
In his view the SA education system is as much to blame as the financial institutions themselves for failing to ensure that young people are financially literate. Moreover, he blames the education system for not ensuring that young people fully understand the implications of entering into a credit agreement, whether it is to borrow money – often at high interest rates – or buying furniture or luxury goods on extended period credit agreements. They do not realise how much of their repayments go to servicing the interest on the loan.
Roets said the rate at which people are getting themselves into financial trouble is more than doubling each year. “The grim reality is that the majority of consumers in South Africa owe some 75% of their pay checks to creditors for loans, usually with very high interest rates attached to them.”
He warned that the reality is that many South Africans have become totally dependent on credit and without help, will probably never be able to pay back what they owe.