Abstracts

48 on having the most sophisticated and mature financial system in Africa. However, the transition for the labor force was not smooth— workers from the labor-intensive sector often struggled to transfer their more limited skill sets to the financial services industry. Pauw and colleagues (2006) showed that within the mining sector, fewer than 5% of the workers are skilled, whereas in manufacturing, the ratio hovers around only 10%. With respect to the financial services sector, the ratio is around 50%. Having few skills to re-enter the market, such disadvantaged workers remain unemployable. This skills mismatch is one of the root causes of the unemployment problem in South Africa. In previous technological revolutions, despite the increase of machine power, humans remained the driving factor for the economy. However, under the new digital revolution, low-skilled workers are at risk of becoming the “useless” class, a term coined by Harari (2016), who argues that with the proliferation of AI, low-skilled people become unemployable. Previously, new technology was introduced to increase efficiency and allow humans to pursue higher-level cognitive processes; however, AI has both the physical and cognitive capabilities that can outcompete low-skilled workers (Harari, 2016). Thus, the structural unemployment problem coupled with a limited-skills labor force exposes South Africa to a high risk of being left behind by the upcoming changes in nature of work. The current development is already taking place and will only increase the burden on the South African government. A High Concentration of Low-skill Jobs Today, half the jobs created in the South African economy come from what is known as the community, social, and personal services (CSPS) sector, specifically elementary jobs that are considered at high risk of displacement (Reddy et al., 2019). According to the South African National Qualifications Framework (NQF), those jobs indicate the lowest attainment levels, ranging from 1 to 2 on a scale from 0 to 10, with 10 the highest achievement a person can attain. The NQF was one of the first legislative packages passed by the African National Congress government after 1994, with the “goal of integrating the quality measurements of the education system and of the workforce” (Reddy et al., 2018, p. 47). This is a progressive idea aimed at addressing poverty, unemployment, and inequality by Table 1 Changes in the Occupational Structure Main Occupation 2014 2016 Absolute Change Percentage Change Manager 1,331,000 1,356,000 25,000 1.9 Professional 842,000 866,000 24,000 2.9 Technician 1,552,000 1,470,000 −82,000 −5.3 Clerk 1,653,000 1,642,000 −11,000 −0.7 Sales and services 2,326,000 2,481,000 155,000 6.7 Skilled agriculture 76,000 68,000 −8,000 −10.5 Craft and related trade 1,813,000 1,927,000 114,000 6.3 Plant and machine operator 1,277,000 1,284,000 7,000 0.5 Elementary 3,295,000 3,681,000 386,000 11.7 Domestic worker 981,000 1,005,000 24,000 2.4 Total 15,146,000 15,780,000 634,000 4.2 Source: Reddy et al. (2019).