Much to gain from Youth Wage Subsidy, Study finds
Johannesburg, 6 February 2013 (SBP) - South Africa's small and medium enterprises are broadly supportive of the introduction of a Youth Wage Subsidy, and would use it to take on new employees.
It is also affordable and will not penalise older and more experienced workers. This is a message to emerge from the second round of the SME Growth IndexTM, produced by business environment specialists SBP.
The SME Growth IndexTM is a multi-year research project, investigating the views and experiences of a panel of some 500 SME operators in the South African economy. These firms employed between 10 and 50 people, and are active in three sectors of the economy regarded by government as having growth potential: manufacturing, business services and tourism. The first and most comprehensive such study of its kind in the country, it allows the dynamics relating to firms' growth, survival or decline to be tracked over an extended period of time. The first round was conducted in 2011 (published in a report in that year under the title Priming the Soil, available for download on the website www.smegrowthindex.co.za ), and the second in 2012.
Some 55% of firms surveyed were in favour of the youth wage subsidy. A majority of firms employing between 10 and 39 people supported the subsidy - this was especially pronounced among those employing between 31 and 40, a group within which a great deal of business expansion appears to be taking place. Around 75% of firms employing between 31 and 40 people supported the subsidy. Support for the subsidy was highest in the manufacturing sector.
These results suggest that the wage subsidy could provide important support to key sectors of the SME community. In particular, it stands to benefit our often struggling manufacturing firms - a key element of government's own strategic economic thinking.