Does South Africa have a chronic skills shortage? The belief in such a shortage appeared to be pretty much universal until this week when the Commission for Employment Equity suggested that the shortage was nothing more than an ‘urban legend’. To answer the question it is first necessary to measure the skills inflow into the economy and then to ask whether this inflow is sufficient to sustain demand and economic growth.

In 2004 there were 1 057 935 pupils in grade 10. In 2006 528 525 of those same pupils were in grade 12. In other words 50% had dropped out. Of the 2006 grade 12 class 351 726 passed matric and 84 741 passed on higher grade. Only 25 217 passed mathematics on higher grade. This was 2.3% of the grade 10 class of 2004. These small proportions are the core of any future skills supply and these numbers are therefore the first important indicator of whether a skills shortage exists.

Research previously published by the South African Institute of Race Relations showed that 43% of higher grade maths passes went to whites. This data is for 2003. In that year 14% of HG maths passes went to Indian pupils and 5% to coloured pupils. African pupils therefore earned only 35% of higher grade maths passes in that year. Making the fairly safe assumption that a maths revolution did not take place in the school system between 2003 and 2006 it is probable that only 60% or approximately 15 000 of the 2006 HG maths passes went to ‘black’ pupils of which approximately 9000 went to African pupils. These relatively small numbers represent the black skills core that is expected to supply a good proportion of employment equity demands.

The output of the university sector closely mirrors that of the school system. In 2004 13 141 students graduated from universities with qualifications in commerce, business, and management. More than half of those qualifications went to white graduates. Indian graduates earned 1 722 or 13%, coloured graduates 650 or 5%, and African graduates 3 998 or 30%. These figures mirror almost exactly the HG maths output figures of the school system. In engineering a similar pattern is evident. In 2004 a total of 2 462 graduates were produced by the university system. Of these, 1 515 or 60% were white, 303 or 12% Indian, 57 or 2% coloured, and 587 or 24% African. In law in 2004 the university system produced 3 999 graduates. Whites again dominated the sector, earning 1 877 or 47% of all awards. ‘Black’ graduates earned 53% with 38% being awarded to African graduates. Similar patterns exist for most highly skilled qualifications.

The trend over time is somewhat more positive than the ‘still frame’ image of 2004. Going back more than a decade to 1993,‘black’ graduates earned only 1 424 university awards in commerce or 17% of the total for that year. By 2004 the number had risen to closer to 50% over a period that saw the number of such awards increase by over 60%. In 1993 only 11% of 2 012 engineering awards at university went to ‘black’ students. In 2004 that figure was up 40%. In law in 1993 ‘black’ graduates made up 27% of the graduating university class. A figure that had risen to over 50% by 2004.

Having identified what skills become available to the economy every year and the demographic breakdown of those skills what remains to be done is to answer the question of whether these are sufficient to feed economic growth of 4%-6%. In South Africa’s case this question is complicated by needing to answer the parallel question of whether the demographic breakdown of these skills is sufficient to meet employment equity targets.

In 2004 a total of 20 000 business, commerce, management, engineering, and law graduates left the university system. These are obviously not the only skills demanded by a growing economy but they are most likely to be those individuals who will in time rise into the ‘meaningful’ management positions with which the Employment Equity Commission is particularly concerned. Of these approximately 10 000 were black. Not all of these entered the labour market immediately; some may have studied further or traveled overseas. The 10 000 therefore represents a probable maximum number of very well qualified black professionals entering the labor market annually.

If these 10 000 are sufficient to meet all employment equity demands across all industries, including government, then the Commission is correct and South Africa does not have a skills shortage. But it is unlikely that this is the case. Government is itself a good example. Obviously committed to employment equity, several government departments still run with high vacancy rates in key skilled managerial positions. This is unlikely to be due to the government department’s reluctance to employ skilled black professionals. It is more likely to be a function of supply together with some bureaucratic inefficiency.

The listed (mainly) private sector is a better example. If each of the 388 listed companies on the JSE were to share the 10 000 black graduates between them that would mean only 26 graduates per company and would leave nothing for all non-listed enterprises or government departments. This is admittedly a silly comparison but only because it tries to answer a silly question. In so doing it does, however, demonstrate just how chronic the skills crisis really is.

Addressing the crisis is another matter altogether. The skills in any society are a function of the quality and efficiency of the education system. Addressing skills shortages therefore requires addressing shortcomings in the education system. This cannot be achieved by addressing alleged shortcomings on the part of employers who are the end users of skills. In threatening employers with fines for not appointing skills that are not available the Commission appears to have missed this most fundamental point of departure completely.