By Papama Meleni

In a nation where youth unemployment is a startling 58,7% and the unemployment rate is around 32.9%, South Africa faces a paradox that could jeopardize its future prosperity: those who pursue higher education as a means of success frequently end up becoming unemployed themselves. Consideration of the COVID-19 Social Relief of Distress (SRD) grant’s continuation beyond its initial emergency implementation raises an equally urgent question: Should we provide comparable support mechanisms to recent graduates who, in spite of their qualifications, experience prolonged unemployment?

The Significance of Social Safety Nets

Social safety nets provide essential protection from economic shocks while raising educational attainment, lowering poverty, and enhancing health outcomes. According to the World Bank’s comprehensive analysis in “The State of Social Safety Nets 2015,” which reviewed over 160 rigorous impact evaluations, these programs demonstrate remarkable effectiveness: they reduce the poverty gap by 15 percent on average in low- and middle-income countries, with some countries like Hungary, Mauritius, and Poland achieving reductions of over 50 percent through their safety net programs. The World Bank’s research reveals that this effectiveness has led to universal adoption, with every country in the world now operating at least one social safety net program, collectively supporting 1.9 billion beneficiaries globally.

Beyond immediate poverty relief, the World Bank’s analysis shows that cash transfers generate substantial economic returns with income multipliers ranging from $1.34 to $2.52 for each dollar transferred. These programs enable productive investments by increasing beneficiary households’ likelihood of owning more expensive and lucrative livestock by about 8 percentage points while enhancing investment in both agricultural and non-agricultural income-generating activities. The World Bank’s extensive research consistently demonstrates that social protection measures increase nutritional status, health outcomes, and school attendance while maintaining long-term gains in living standards and supporting broader economic growth.

Introduced in 2020 as a pandemic emergency measure, the R350 monthly SRD grant has become a vital instrument for reducing poverty for almost 8.5 million South Africans. Its several renewals reveal an underlying understanding that persistent intervention is necessary to address structural poverty and unemployment—problems that existed long before COVID-19. The SRD grant succeeds because it acknowledges that structural problems, not personal shortcomings, are frequently the cause of financial difficulty. The situation of unemployed graduates is no exception to this rule.

The Difficulties Graduates Face

There are many obstacles for graduates to overcome when they proceed from university to the workforce, especially those from underprivileged backgrounds. Many of them have trouble finding stable, lucrative jobs despite their qualifications. Without proper assistance, graduates risk falling into poverty during this crucial transitional phase, which would undermine the educational investments they made.

SASSFE and other organizations have put forth a lot of effort to ensure that deserving students from underprivileged backgrounds may enter higher education. The premise behind these initiatives is that education is the great equalizer, the route to both economic stability and social mobility. Many graduates, however, find that this promise is not realized when they join a labor market that is unable to employ them.

Due to the expectations of their family, who made sacrifices for their education, and the possibility of student loan debt, these young professionals are in an especially harsh situation where they are unable to obtain jobs that aligns with their skills. In contrast to their less educated peers who could be eligible for different social grants, graduates frequently evade our social support networks since they are too qualified for certain forms of aid yet unable to sustain themselves financially.

The Case for Graduate Support

There are several reasons to provide unemployed graduates with SRD-type assistance:

1. Preventing Brain Drain: Many outstanding graduates are obliged to drop out of university for any available employment, which is frequently informal or unrelated to their training, if they do not have financial support during the job-search phase. This amounts to a significant loss of human capital and wasted money on schooling.
2. Enabling Productive Job-Seeking: Many grads are forced into survival mode by financial hardship, when their only concern is making ends meet right away. They may pursue worthwhile job methods, such as going to industry conferences, networking events, or interviews, or they could continue honing pertinent skills with a minimal stipend.
3. Bridging to Entrepreneurship: Many graduates lack the bare minimum of financial stability necessary to follow their creative ideas, which might lead to jobs for both themselves and others. Support for graduates might serve as small businesses’ actual money.
4. Completing the Educational Investment Cycle: In order to create the human capital that propels economic growth, our country invests in education. If we fail to integrate graduates into the job market at the last stage, this investment is not complete.

 

 

Benefits of Extended Social Safety Nets

Expanded social safety nets with graduate assistance will protect vital human capital by preventing qualified professionals from accepting subsistence employment that squanders their specialized skills. When graduates are compelled to work in informal or unrelated positions, their expertise deteriorates while society forfeits the return on its educational investment.

Graduate assistance also enhances social cohesion by addressing the profound disillusionment that emerges when educated young people cannot secure meaningful employment despite their qualifications. When education consistently fails to deliver promised opportunities, public trust in institutions erodes and social tensions intensify. By providing targeted support to unemployed graduates, society demonstrates its commitment to honoring the social contract with those who invested in their education, thereby preserving both individual hope and broader societal stability.

Unlike general welfare payments that primarily meet consumption needs, graduate assistance generates substantial multiplier effects. By enabling beneficiaries to pursue optimal employment matches rather than desperately accepting the first available position, it unlocks significant productivity gains. Moreover, it provides graduates with essential capital to explore entrepreneurial ventures, potentially fostering innovation, economic diversification, and job creation for others.

 Moving Forward

South Africa’s substantial educational investment remains incomplete until graduates can successfully transition into the workforce. The success of the SRD grant demonstrates that expanded social protection is both feasible and necessary. By supporting unemployed graduates, South Africa can optimize returns on human capital development and complete the educational investment cycle. In a knowledge-based economy, the critical question is not whether the nation can afford such support, but whether it can afford to squander the talents and potential of its educated youth.