Many facets to proposed youth wage subsidy

The debate over youth wage subsidies has heated up since the ANC decided to support it ("ANC fired up over policy changes", Business, February 8). It is typically South African in that the protagonists talk in slogans and soundbites that are not followed by deeper expositions.

The scheme was proposed by the treasury several years ago, which has always been in the crosshairs for what its opponents regard as neoliberal economic prescriptions. The opposition Democratic Alliance immediately appropriated the proposal and used it for political gain, including the march on Cosatu House in 2012 that ended in scuffles.

Advocates of the scheme indicate that a few hundred people will benefit over three years. They underline that it is not a silver bullet but one in a series of programmes and pro-poor policy measures.

Opponents put forward several arguments. One is that international experience shows the scheme to be open to abuse by employers who retrench older workers and hire younger ones. The advocates concede this point, but argue that the benefits preponderate.

Another argument is that the scheme benefits employers and not the young jobseekers. Some even argue that the money should be paid directly to the young person in some form of a grant.

Employment incentives, industrial and export incentive schemes are not revolutionary. Neither are wage agreements. They have a small but significant effect on the life of the beneficiary. Taken together with other policy measures, they can make a difference. Together, government, labour and responsible businesses must monitor compliance and punish offenders. – Vuso Shabalala, adviser in the presidency

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