Youth wage subsidies no solution - COSATU

Federation says when given to businesses such subsidies lead to worker displacement

COSATU Commemorates Youth Day, 16 June 2012

On Youth Day 2012, the Congress of South African Trade Unions salutes the heroes and heroines of 16 June 1976, whose fearless confrontation with the forces of the apartheid dictatorship paved the way for the freedom and democracy we enjoy today.

This June 16 Commemoration coincides with the 20th anniversary of the Boipatong massacre, which is one of the most painful chapters in our history, when our people were stabbed, maimed and butchered by the enemy camp in the thick of the night as part of the apartheid state's strategy to derail the process of change in our country.

COSATU dips its revolutionary flag to salute the martyrs of freedom that were painfully slaughtered on 17 June 1992 by the apartheid regime and its collaborators. The twentieth anniversary of the Boipatong Massacre is a reminder of the bloodshed that accompanied our quest for democracy.

This year, as we celebrate 36 years since the 1976 uprising we ought to remember that this revolt was not merely about the introduction of Afrikaans as a medium of instruction in black schools but was also a response to the growing misery in black townships as a result of apartheid capitalism.

The youth uprising cannot be divorced from the 1973 workers' strikes which began in Durban. The 1976 revolt was born of the struggle against poverty, unemployment, a poor education system for blacks, hostile labour relations and squalid living conditions in the hostels and the townships. 1976 revived the faith of the people in their organisations and that indeed apartheid must be brought to its knees.

The challenge meted out by the working class against apartheid councillors in the eighties and the offensive against Bantustan authorities drew inspiration from the courageous generation of 1976. The alliance of the youth and workers against apartheid, despite serious challenges, was strengthened during this period.

As we commemorate 36 years since the 1976 uprising, we note the terrible socio-economic conditions of young people in this country today. Young African men have an unemployment rate of 39% by the narrow definition of employment, and 48% by the definition which includes discouraged work seekers.

Young people under 29 make up 27% of the employed. If you include those up to 34 years the number increases to 44%. 31% of African men earn under R1000 per month compared with 1% of young white women. 46% of young African women earn under R1000 per month. And young workers are more likely to be in informal, contract and part-time employment.

Many young people still toil in factories and farms, die in the mines, are permanent temps in the retail and wholesale sector and are super-exploited by labour brokers. Although government has managed to get 1.4 million people on Aids antiretroviral treatment, we still languish under a malfunctioning public healthcare system.

This youth day should be dedicated to transforming our education system, which is currently failing most working-class children, who are trapped in a system in which 70% of matric passes are accounted for by only 11% of former model C schools; 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. Millions of young people are still excluded from accessing education beyond secondary school.

We are sitting on a ticking time bomb of youth unemployment, poverty and mounting impatience. COSATU firmly believes that the last thing young people in this country need is a youth wage subsidy which is will only enrich capitalists and further segment the working class. There is a wealth of evidence from their application in the UK, the US, Canada and many other countries to show that youth wage subsidies do not make inroads in denting unemployment levels. Such subsidies given to businesses actually lead to worker displacement, super-exploitation and an attack on decent work.

Studies have shown that these subsidies have produced enormous deadweight loss, which means that companies get compensated for employing people they were likely to hire in any case. AN international country experience study conducted in 2006 suggests that wage subsidies given to companies as an incentive to hire certain targeted groups such as youth do not produce negative results.[1] Most studies alternatively make the case for subsidies directly given to workers combined with the enhancement of job search assistance programmes.

COSATU believes that a wide range of measures can be pursued to create the much needed jobs for youth in this country. This package includes an industrial policy to stimulate labour absorptive sectors of the economy, the adoption of a developmental fiscal and monetary policy, support genuine youth cooperatives, transformation and more coordinated use of Development Finance Institutions such as the IDC and the Land Bank as well as support the enhancing job creation capacity of the health and higher education and training sectors.

COSATU urges all young people in this country to preserve the memory and ideals of heroes like Solomon Kalushi Mahlangu, Andrew Zondo and Steve Biko by fighting against the injustice and misery that the capitalist system continues to impose on humanity.

Statement issued by Phindile Kunene, Shopsteward Magazine Editor, COSATU, June 15 2012

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