The unemployment problem in South Africa can be described as structural in nature, given that there appears to be an ongoing, almost intractable, mismatch between the types of workers demanded by firms and those supplied in the labour market. The South African economy, like many other economies following a natural development path, has seen a structural shift in production towards more skill- and capital-intensive industries.
Pressure to become technologically more advanced and the effects of increased global competition have further increased the demand for high-skilled workers at the expense of low-skilled workers. It is, therefore, understandable that South African unemployment is most prevalent among poorly educated, low-skilled workers. Within the context of increased demand for skilled workers and reported skills shortages the phenomenon of rising graduate unemployment is worrying. Unemployment among graduates in itself is insignificant in the context of broader unemployment in South Africa .