POLITICS

Youth Wage Subsidy no solution - Zwelinzima Vavi

COSATU GS questions President Zuma's claims that 133 000 employees have benefited from scheme

Address by COSATU General Secretary, Zwelinzima Vavi, to the COSATU Limpopo Youth Forum, 25 June 2014

Thank you for inviting me to address this important gathering in Youth Month, 38 years since the massacre of unarmed students and youths in Soweto, when they marched on 16 June 1976 against the Bantu Education Act.

We must never allow that historic day to be forgotten and must continue to honour the memory of those young South Africans who were prepared to sacrifice their lives so that we could live in a non-racial democracy. Their brave action was the turning point in the struggle against apartheid and racism, sparking unstoppable waves of protest which culminated in the democratic breakthrough of 1994.

It makes me feel so good to speak to you at this conjuncture. You are the inheritors of our beloved COSATU and the future of our country is in your hands. You are going to inherit a COSATU that has a colourful history with countless victories worth celebrating. It has been the sole voice of workers, whose influence extends beyond its two million members. It has been seen as a fearless spokesperson of the interests of the downtrodden, a reliable ally and friend of the most marginalised everywhere in the world. 

COSATU not only occupied the front rows, as a leading component of the motive force for liberation, but played a key role in shaping the future of our country by not only ensuring a progressive constitution but as the midwives of progressive left thinking.

I don't want to speak to you about the glorious history, for I know while historic materialism is so critical in any revolution and that it can't be ignored, it does not put food on the table nor does it resolve today's challenges.

COSATU is facing its darkest hour. Never have divisions reached such proportions as to threaten the very future of this injured giant. Never have we been so paralysed! The price workers are paying, as a result of this unfortunate state of affairs, is so profound that it risks reducing all of us into has-beens. 

The mandates workers gave us at our 11th National Congress are largely lying idle. Our four basic instructions were to: bury the apartheid wage structure and fight for a new incomes and wage policy; fight for a radical economic transformation; rebuild and strengthen our organisation, and engineer our Lula moment. We have detailed proposals on each of these, based on research and serious work within our organisation.

We are currently involved in a process of confronting these divisions. Unity of workers is sacrosanct but it must be based on principles. To simply compromise all those principles is not a solution to the challenges workers face today. Workers are crying out for a return to a COSATU that speaks truth to power. They want a COSATU that will lead a fight against labour brokers and e-tolls.

They don't want a debating society or a sweetheart that is loved by those who are comfortable with the status quo. They want tangible change and they want a thorough going and radical transformation.

I am happy to have come here because I have adopted an attitude that says we must go on and move COSATU forward, dragging those who are very happy with the divisions screaming and kicking behind us. So let's talk about our challenges and what should be our solution to them.

Let's start on a positive note and celebrate that, thanks to our democratic constitution and the many progressive policies implemented by the ANC-led government - under pressure from student and youth organizations such as the Congress of South African Students and the South African Students Congress - young people have access to opportunities to better themselves and their communities that the black majority did not have before 1994.

Initiatives such as the National Student Financial Aid Scheme have helped to address the imbalances of the past by funding education of the historically disadvantaged individuals. 12% of the population now hold a postgraduate qualification up from 7% before 1994.

Access to education has improved and we making progress in declaring more schools as no-fee schools. More and more children get free meals and mud schools are slowly being eliminated.

Sadly however, many of these gains have not changed the reality of youth marginalisation and exclusion. The latest Stats SA report on national and provincial labour market trends among the youth, released on 5 June 2014, painted a horrifying picture of the growing number of young workers who are unemployed and therefore cannot enjoy the opportunities which they should be entitled to.

"The unemployment rate among youth [aged 15 to 34]," says the report, "increased from 32.7% to 36.1% between 2008 and 2014. It reveals that in those years, the youth unemployment rate has, on average, been 20% higher than that of adults. Youth make up 52% to 64% of the working population, yet account for only 42% to 49% of those with jobs.

One of the reports most worrying revelations the high incidence of long-term youth unemployment: "In 2014, close to two-thirds of young people were unemployed for a year or longer, while young people accounted for 90% of those who are unemployed and have never worked before."

COSATU remains deeply concerned at the massive number of unemployed young people. It is a tragedy for themselves, left with no chance to earn an income, build a career or work to improve the lives of their compatriots.

It is also a crisis for society as a whole, who lose so much through not being able to benefit from the contribution these thousands of young workers could make to the economy and improving the lives of all South Africans.

In addition it creates a layer of angry, frustrated young people who will not indefinitely put up with this assault on their basic right to earn a decent income. Hence our frequent reference to ‘ticking bombs', some of which are now exploding in violent community ‘service delivery' protests.

Poverty, unemployment and the lack of recreational facilities leave young people with a feeling of hopelessness and worthlessness. If they see no prospect of ever getting a decent job and enough money to live a normal life, many are tempted to get involved in criminal gangs or seek escape and oblivion through the abuse of alcohol and drugs. Nyaope, together with HIV and AIDS, are among the prime enemies of young people.

This situation has to be treated as a national emergency; it should be a top priority for government and society as a whole to find solutions before more bombs start exploding. As President said in his State of the Nation Address, the economic crisis of unemployment, poverty and unemployment must "take centre stage".

That is why COSATU's 2012 National Congress called for a radical transformation of our economy, to break historical patterns of colonial exploitation and dependence, which are the root cause of the problem. The crisis of unemployment is structural, rooted in the economic fault lines we inherited from our colonial and apartheid past - weak infrastructure, monopolies and cartels, an economy over-dependent on the export of raw materials, and a dysfunctional public health and public education that sidelines millions and denies them the necessary skills.

COSATU has a comprehensive response to this crisis. We have placed on the table a growth path for full employment which has been largely ignored because we did not back it with mass action. Unless we end this paralysis and get back into being a militant and fighting formation we slowly going to become irrelevant.

We have many policies that, if they were to be aggressively implemented, would make a difference. The Industrial Policy Action Plan, the National Infrastructure Plan and the Youth Employment Accord have a huge potential - but are all constrained by inappropriate fiscal and monetary policies.

COSATU welcomes the President's commitment to create a million new jobs in agriculture by 2030. As well as creating employment, the expansion of agriculture must also be geared to providing food security to make sure that no-one goes to bed hungry, as thousands do today.

We also welcome the speech's emphasis on the expansion of the energy sector, which will be critical to the success of our economic transition, though we have grave reservations about the big rush to expand the use of nuclear energy, given its dangers and unaffordability, and, unless the Public Finance Management Act is rigorously observed and bidding is open and transparent, we will end up with another arms deal on our plate.

In the medium- to long-term the priority is to move with greater urgency to take forward complete what has been defined as the 2nd Phase of the Democratic Transition, to change our economy from one over-dependent on the export of raw materials into one based on manufacturing industry, and the creation of sustainable and decent jobs. This must include COSATU's policies for other macro-economic changes, including:

▪ Decisive state intervention in strategic sectors of the economy, including through strategic nationalisation and the use of various macro-economic and other levers at the states disposal

▪ An overhaul of our macro-economic policy

▪ Treasury to be urgently realigned and a new mandate to be given to the Reserve Bank, which must be nationalised

▪ The National Planning Commission to be given a renewed mandate, to realign the National Development Plan (NDP), in line with the proposed radical economic shift. 

▪ Aspects of the New Growth Path to be realigned in line with the new macro-economic framework.

▪ All state owned enterprises and state development finance institutions to be given a new mandate.

▪ Urgent steps to be taken to reverse the current investment strike and export of South African capital - including capital controls and measures aimed at prescribed investment, and penalising speculation.

▪ The urgent introduction of comprehensive social security.

In addition the National Development Plan must be rewritten to bring it into line with these developmental policies, and purged of its anti-worker, neoliberal policies, which, in their earlier guise as GEAR, were the main cause of our current crisis of unemployment.

In the short term we need to speed up the implementation of the many initiatives contained in the Youth Employment Accord signed in July 2013, such as:

• Youth brigades, to give young people a chance to serve their communities, provide some work experience and training, integrate youth into a social movement, build social cohesion and earn a stipend;

• A solar water heater installation programme to become a youth-focussed sector, employing only young people in installing the heaters, and supporting youth cooperatives and youth-owned enterprises as providers of installation services and maintenance for the programme;

• A green brigade, focused on the Working for Water, Working for Energy, Working on Fire and other environmental programmes, and increasing the intake of young participants in other environment protection and promotion activities; 

• Health brigades, to expand home-based care and health and wellness education to communities as part of the NHI and auxiliary health services;

• Literacy brigades to utilize young people to expand adult literacy training; 

• The Expanded Public Works Programme and the Community Works Programme to absorb at least 80% of new entrants from young people;

• All state departments to introduce a focused internship programme, aiming at employing interns over a period of time equal to 5% of the total employment of the departments;

• Second-chance matric programmes for those who have not passed or have poor results, and expanding the intake of FET colleges as part of building a stronger vocational and technical skills base among young people to complement the current focus on academic training.

Significantly this Accord did not even mention the Youth Wage Subsidy, now called the Employment Tax Incentive Act, which unfortunately the Democratic Alliance and big business have persuaded the government to adopt.

This is not a solution of the problem at all. It will simply lead to millions of rands of tax-payers' money being doled out to employers, to incentivise them to do what they should be doing anyway -employing and training more young workers.

In his State of the Nation Address, the President claimed that this tax handout to employers has benefited 133 000 employees in only five months, but he failed to mention how many other employees have lost their jobs in order to create space for those 133 000, and commitments by government to monitor this scheme to ensure that there is no substitution of older workers has not, to our knowledge, been implemented.

The millions of tax-payers' money which is now to be handed out to employers would be far better spent to fund all the projects in the Youth Employment Accord.

The other long-term solution is the transformation of our crisis-ridden education system, which contributes to the youth unemployment crisis. The connection between youth unemployment and the high failure rates in schools is clear. 95% of all people who are unemployed have no tertiary qualifications. The majority of those unemployed do not have even standard seven or matric.

Despite the advances in the education system since1994, the children of the working class still suffer from the unequal education system, bequeathed by apartheid.

It is estimated that only 3% of the children who enter the schooling system eventually complete with higher-grade mathematics. Children of poor parents remain trapped in an inferior education with woefully inadequate infrastructure:

▪ 70% of our schools do not have libraries;

▪ 60% do not have laboratories;

▪ 60% of children are pushed out of the schooling system before they reach grade 12.

▪ 70% of matric exam passes are accounted for by just 11% of schools, i.e. the former White, Coloured, and Asian schools.

That is why we must continue to demand:

▪ Free, quality public education for all, as promised by the Freedom Charter;

▪ A programme to upgrade infrastructure in public schools;

▪ The elimination of mud schools and the reinstatement of the feeding scheme and the scholar transport system, and

▪ Increased training and support for teachers in rural and township public schools.

If we are to succeed in this historic campaign to give young workers a future, you, the young generation of union members, have a decisive role to play. Our 11th National Congress called for a mind-set change and to organise the unorganised, which includes a disproportionate number of youth.

New recruitment targets need to be set for each sector, and unions must regularly report progress in recruitment to the CEC, targeting women, vulnerable and migrant workers, and young workers.

The future of the workers' movement in Limpopo is in your hands. I am sure that you will not let us down and will carry the struggle forward into our 30th anniversary year in 2015 and beyond!

Issued by COSATU, June 25 2014

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