Wednesday, August 28, 2013

Rebuttal


I am writing this rebuttal as a potential beneficiary of the funds. I am not where I thought I would be after my December 2012 graduation. I know the anguish of being educated and unemployed; I know the stress that comes with being broke and almost hopeless. The worst feeling ever.

Resolved: unemployed University graduates should be given monthly unemployment benefits of  KES 15,000
 
Introduction
Consider a single mother, she sold her little piece of land, her single most valuable asset so she could pay for her son’s subsidized university fees. Four years later the young man has graduated, he has looked for work in all corners without success. He has no source of reasonable income, no possible social cushion, nowhere to run to! Not even his home village, the shame would kill him and their only peace of land was invested in his "promising" education. 15,000 KES a month to this young man would change his world. 

Kenya’s formal labour market has no ability to absorb the more than half a million graduates clearing campus every year. This means for several years after university young men and women are going to stay unemployed. The longer they stay the worse things will get, options will get limited, talent will get eroded and most of the skills they had acquired will get wasted. Disillusionment is always knocking.

In my tweet to @IEAKwame (CEO Institute of Economics Affairs),  I told him that there are social benefits associated with the KES 15000  unemployment "payout", this is after he wrote an article arguing against the bill terming it as the worst policy idea ever. He asked that I justify my argument. 

Below are my justifications.

Social cushion
As things stand, I cannot afford to take any investment risk; I have nothing to fall back to. In case I fail, I burn completely. With a guarantee of 15,000 every month, more and more young people will be a bit bolder in their endeavors; they will pursue business ventures with more confidence. The benefits will be multiplied in terms of opportunities getting created.

Incentive for more people to pursue higher education
Nothing can be a better incentive for people to join university education than a guarantee of “income” after you complete. The more educated a population gets, the better a country gets both socially and economically.

Government Commitment
I think a government has to take responsibility for educating its citizens and then failing to provide them with an income source; whether through direct employment opportunities in government sectors or creating an environment for multiple employment creation. It is therefore noble that this government is committing to making life of the educated-unemployed a little bit bearable. Evidently, as it has been pointed out by several economists, the government will not be able to support this program for a long time, so once its muscles get stretched towards its limits they will have to come up with better alternatives for tackling youth unemployment. They will have to commit much more towards developing innovative targeted employment programs.

Disposable income
If the government takes up the responsibility of supporting the unemployed graduates, parents will be relieved form the burden. This means more money to spend on clothes, entertainment and other luxuries. This creates a value chain that leads to the creation of jobs even for the unskilled people.

Conclusion
As Kwame clearly highlighted, the government of the day seems to throw money at every policy challenge it faces. It is as if the money is readily available and somehow it will make everything better. That is totally not the way to go, but in this situation the money will go a long way in improving this country and sparing a lot of young people from unnecessary misery.

I am no policy expert; I am a concerned policy enthusiast.

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