Youth unemployment, especially for rural and township working class youth, from under resourced schools, is heading towards a crisis if the government and private sector do not take sustainable steps to increase post school education and employment opportunities. It is very concerning to note that the latest QuarterlyLabour Force Survey, records that approximately 3.1 million youth aged between 15 and 24 are not in employment, education or training.
EE therefore supports the call for a serious plan to expand the economy that can address the underlying challenges of unemployment. The illusion of the youth wage subsidy is not such a plan and must be dispelled.
On 1 January 2014 the Employment Tax Incentive Act came into force, introducing the youth wage subsidy for businesses employing workers between the ages of 19 – 29 and earning between R2000 and R6000 per month. The subsidy promises to increase employment for the youth, however our ten concerns submitted to Treasury in November 2013 cautioned that the subsidy is unlikely to create new jobs for young people and is unlikely to sustainably reduce youth unemployment. However, despite local and international evidence, as well as Treasury’s document confirming the unlikely positive outcome of the subsidy, the government has decided to pursue this R5 Billion policy experiment.
In all likelihood, it will be very difficult to monitor which companies are accessing the subsidy, where they are located and what type of industries they come from because the government has no evaluation system in place. Moreover, we unable to verify how often companies are accessing the subsidy and thus how long youth are able to stay in employment because there is no such monitoring system to tell us. The government should implement a monitoring system as a priority to ensure accountability and transparency in how the subsidy is accessed by companies.
Of direct relevance to increasing the possibility of decent work is access to further education and training institutions. This is a scarce commodity for most youth because there are only 24 universities and 50 FET colleges to cater for the entire population. With this limited number of further education institutions available, we would have expected the youth wage subsidy to include a more stringent requirement to train beneficiaries, however there is no obligation. Although the Minister of Finance has the power to compel companies accessing the subsidy to provide training, it is concerning that no pronouncements to this effect have been made. This calls into question the government's intentions to meaningfully develop the very few youth who will benefit from the subsidy.
The youth wage subsidy is only a small part of the possible interventions that the government can take up to increase employment for the youth. The first is a clear plan to grow the economy and make sure our GDP is directly proportional to the standard of living of the South African majority. The second is a drastic improvement to the basic education system prioritizing infrastructural development, teacher training, curriculum reform and general good management of schools. The third is drawing a clear link between providing training and accessing the subsidy, which can be amplified through creating additional structured paid training and internship programmes in companies. Fourth, we insist government implement a coordinated national youth service scheme to equip schools, libraries, hospitals, clinics, sports and recreation centres and upcoming infrastructure projects with additional capacity.
Equal Education supports the efforts by NUMSA and others to dispel the illusions of the youth wage subsidy. The national state has a vital role to play in providing meaningful jobs for young people. But more is required. EE calls upon the private sector to provide skills training and internships for the youth. And EE calls upon the trade union movement and the ANC to lead an international campaign for a global minimum wage that can stop the race to the bottom and ensure that all workers, including South African workers, can earn a reasonable living.
From government we demand a monitoring system of the subsidy that will ensure that the billions invested translate into skilled youth, sustainable growth and a healthy economy.
Equal Education is an independent membership-based organisation. We work with progressive organizations where there is agreement on policy or campaigns
For comments contact
Brad Brockman, Equal Education General Secretary
072 267 8489
Doron Isaacs, Equal Education Deputy General Secretary
082 850 2111
Nombulelo Nyathela, Equal Education Spokesperson
076 900 1029
Tshepo Motsepe, Equal Education Gauteng Co-head
071 886 5637
