Yesterday the DA Youth launched our campaign for the introduction of a wage subsidy targeted at young South Africans. We will be mobilising young people across the country to support this campaign in coming weeks by signing a petition that we will hand over to the Presidency.
The petition can be signed online.
The high cost of hiring labour in South Africa is the key reason why 3.1 million South Africans aged 15-34 were unemployed in the first quarter of 2010. The DA Youth proposes the subsidy of wages of first-time entrants to the market in order to lower the effective cost of employment without adjusting wage levels in order to create hundreds of thousands of jobs without an adjustment of wages or conditions of employment.
In addition to creating jobs, a wage-subsidy acts as an incentive for on-the-job training. Firms are rewarded for hiring, and they reward themselves by ensuring that those hired are also adequately skilled. The system acts as a powerful remedy to unemployment, by prioritising labour-intensive production and by getting the market to take care of providing skills, rather than the state. This proposal constitutes a significant and necessary departure from the ANC’s SETA-based approach.
Our particular wage subsidy proposal is straightforward: Every time a company or person hires a first-time entrant to the market, the business or individual doing the hiring is eligible to receive a R300 monthly deduction from their monthly PAYE payments. Or, for businesses with fewer than 50 workers, deductions from their tax submission to SARS. For every additional person hired, another R300 deduction can be claimed. In short, the policy works as a hiring incentive to companies.
It is dismaying that certain other youth organisations are lobbying against the introduction of wage subsidies – a proposal that is backed by Finance Minister Pravin Gordhan, and the Harvard Panel that looked at economic policy solutions in South Africa.
The DA Youth believes that opposition to the introduction of wage subsidies is opposition to the alleviation of poverty and the expansion of opportunity. South Africa’s youth, as one, need to tell Mr. Gordhan not to be deterred – and to introduce a wage subsidy programme immediately.
Media Enquiries:
Makashule Gana
DA Federal Youth Leader
082 773 4755
Aimee Franklin
DA Youth Director
072 232 0127
Rihan Kleyn
DA Federal Youth Media and Publicity Chairperson
084 503 8383
Craig Kesson
DA Senior Press Officer
082 361 2321
8 Comments to “Wage Subsidy: DA Youth announces campaign launch”
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George says:
This suggestion is way tooooooo vague. What about the bottom feeding labour brokers? Richard Pike has already being quoted as saying that this would be a ‘sweet spot’ for the shameful labour broking industry. This wage subsidy should only be for companies/businesses who are prepared to directly employ first time entrants. Labour brokers do absolutely nothing to add to employment nor do they create jobs – they merely cash in handsomely on jobs created by others. Allowing labour brokers to benefit in this manner should not be allowed, ever – they are nothing but greedy bottom feeders.
Youth Director says:
This proposal is not for labour brokers, it is for business directly employing first time market entrants – something they do not usually do because the risk is too high. This proposal seeks to minimise that risk.
Ratholo, member of DASO UJ says:
How will your method work better than that of the ANC to decrease uneployed graduates?
minister of higher education-Blade Nzimande sugested that higher education qualifications should be extended by atleast one year, in which during the extended year(s) students will be doing intentionships wethout getting paid. Currently this method is being practiced by health sciences students and I assume it is successful since it has being practiced for years.
Sugestion by the Minister got suport from goverment and private sector. Which I also support as a student.
If Minister’s suggestion get implemented, more students will get much needed experience wethout puting a finacial preasure on employers.
My question to DAY: What makes your suggested method batter than the one suggested by the Minister to reduce uneployment of our young graduate?
Youth Director says:
This issue is two-fold. In order to achieve a definitive solution it needs to be targeted from two angles – the first is that the education itself needs to be more market-appropriate – this is what Minister Nzimande’s proposal looks at. Secondly, and this is where we come in, business is simply not hiring young people because they consider them too inexperienced with too few years in the workplace. A wage subsidy of this nature will reduce the risk to business and create many more opportunities for young people to actually find work. In addition, a wage subsidy of this nature could be implemented fairly quickly and is completely affordable. Mr Nzimande’s proposal has much merit but to put the kind of systems in place to make it happen will not be able to happen quick enough to address the crisis we have right now.
Ratholo says:
How much will it cost goverment to emplement this kind of a project?
Youth Director says:
The cost implications range from R2bn to R6bn per year – if May’s GDP growth numbers continue we should be able to afford it without cutting core expenditure, raising tax or expanding the deficit further. If we wanted to cut from other areas we could look at the now over R1bn wasteful expenditure bill, the R4.6bn spent on pointless district municipalities or the R2bn surplus once the SETA’s are scrapped and replaced with direct re-imbursement of training costs.
Maritha says:
I am sure nobody will support this if you start talking about raising taxes. Government should stop spending on luxuries and that money be used for this project. Another concern business owners are very concerned about, is the continuous strikes urged by unions. The right to strike is a fundamental right, but with the unwillingness of some people to work and then go on strike, we face a problem which won’t be easily solved.
Youth Director says:
The beauty is that the Treasury can afford this right now, with zero tax increase implication.You are also quite right about wasteful government spending – there would be even more to go around if the wasteful expenditure bill of over R1bn was redistributed from cadres pockets to worthy projects.