DA Calls On Premier to Take Lead in Youth Wage Subsidy Fight

Andrew Louw, MPL

DA Northern Cape: Provincial Leader

The Democratic Alliance in the Northern Cape has sent the acting Premier, Grizelda Cjiekella, a letter, calling on her to follow in the footsteps of Premier Helen Zille, who has already implemented two versions of a youth wage subsidy in the Western Cape, and Premier Zweli Mkhize, who is said to be getting ready to implement the youth wage subsidy in Kwa-Zulu Natal.

Like elsewhere in the country, youth unemployment in the Northern Cape is a ticking time bomb. This said, if we are to fight for the unemployed, we need a government that will demonstrate absolute dedication to the cause of upliftment through the creation of opportunity. In this regard, the DA fully supports the implementation of the Youth Wage Subsidy, as outlined by National Treasury.

The treasury has budgeted R5 billion for the Youth Wage Subsidy, which is now stagnating in the budget despite record levels of youth unemployment. This is despite evidence that unemployment was literally halved in Singapore between 2003 and 2007, in part due to the implementation of a youth wage subsidy. Several middle-income countries have also adopted wage subsidy programmes including Korea, Mexico, the Slovak Republic, Chile and Turkey. The latter two have deliberately targeted young workers in their programmes.

In the meantime, the DA run-government of the Western Cape already has two working examples of how a wage subsidy can be implemented. In this regard, the Western Cape government has launched two programmes, similar to a Youth Wage Subsidy. These are the Work and Skills Programme and the Premier’s Advancement of Youth Programme.

The Work and Skills Programme recruits young people, who are placed with a “host employer” for a year, with a minimum of 12 weeks dedicated to skills development. They are each assigned a mentor for the 12-month period where they are paid a stipend of R1000 a month, which employers are encouraged to top up, and they learn practical skills. While working, they can apply for permanent positions that become available at the host employer. Since 2009, 2500 young people have benefitted from this programme and a further 750 will benefit next year. Furthermore, most of those on the programme go on to permanent employment.

Regarding the Premier’s Advancement of Youth Programme, young people from disadvantaged areas who are unable to go to university, are employed in provincial government. They are provided with an income and are also given the skills and experience needed to get a permanent job.

Meanwhile, in Kwa-Zulu Natal Premier Zweli Mkhize, is also standing out from the crowd. He has indicated that the province is getting ready to implement the youth wage subsidy. He was recently quoted in the Business Day as saying that, “We have

long expressed support for the youth wage subsidy initially announced by the Finance Minister Pravin Gordhan two years ago, with an allocation of about R5 billion in the February budget estimates.”

Clearly Mr Mkhize is taking a stand for job creation for the youth. Our acting Northern Cape Premier, Grizelda Cjiekella, can do the same. We have thus sent her a letter, calling on her to be fearless in leading this province. We want Cjiekella to do what is right, not simply to do what appeases Cosatu. Cosatu is opposed to the Youth Wage Subsidy because they know it will make it difficult to unionise these workers. This said, COSATU’s primary objective is to increase union membership, not to increase the number of employed people. That is why they are fighting against an excellent proposal that is clearly in the national interest.

The DA is of the firm view that all in all, the Youth Wage Subsidy would deal a destructive first blow to the wall that still divides South Africa’s economy between the employed and the unemployed. This said, the Youth Wage Subsidy is by no means the be-all and end-all solution to youth unemployment. It will, however, let hundreds of thousands of people into the economy for the first time, and it will kick-start growth and development.

The DA wants to make sure that everyone understands the significant job creation and economic growth potential that the Youth Wage Subsidy holds and why its implementation is being blocked. The DA only hopes that Cjiekella will see the light before our unemployed youth drown in despair.

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