Minimum Wage Laws lead to Surging Youth Unemployment

South Africa’s youth unemployment has skyrocketed over a decade, correlating with increased government spending and exploding welfare grants.

The African National Congress (ANC) has increased state controls on the economy in an effort to achieve “economic redress”. However, younger generations have been priced out of the economy by increased government intervention, in other words: minimum wage laws. Astonishingly, the ANC has doubled down on expansionist laws which led to the shocking 59% youth unemployment rate – aged 15 to 24 – in the first quarter of 2020.

Economic instability has been a feature of South Africa’s fragile economy since former president Jacob Zuma took office. Zuma parted from the economic pragmatism of his predecessors Thabo Mbeki and Nelson Mandela, both of whom to an extent valued a freer market. Consequently, the country moved into an era of stringent labour regulation, more red tape, and higher taxes. This created the conditions for youth vulnerability in the formal and informal economy.

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