Wednesday, 16 May 2012

youth wage subsidy

In the conflict between the Democratic Alliance and Cosatu over the proposed youth employment subsidy both claim to be fighting for the youth but the following points show this to be false:

·         Of all possible things to march about the DA has chosen to march against a trade union federation and in support of the youth employment subsidy. This subsidy is sure to benefit employers, but is likely not to benefit the youth at all and if it does, is sure to benefit them only marginally, as anybody who has read the discussion document of the National Treasury on this should know. Employers that already employ people between 18 and 29 years old at less than R60000 per year will simply claim the subsidy. Those not already employing members of this group are not likely to do so simply because of this subsidy, which amount to a maximum of R12000 over the two years. There is no evidence that ‘high’ wages are stopping employers from employing young people. On average the targeted age group earns about R9000 per year in the formal sector; in the informal sector it is much less. Meanwhile corporate South Africa has a cash surplus of R520 billion. If they could make money employing more young people they would certainly use these billions. The problem is not ‘high’ wages; it is that markets are cornered or even flooded. The treasury itself admits that even if its most optimistic projection of 178 000 new jobs are realised it will have a marginal impact on South Africa’s official youth unemployment figure of 2,4 million to which hundreds of thousands of school leavers are added every year. Meanwhile they project 420 000 subsidies, meaning even in the best scenario 242 000 subsidies out of 420 000 will simply go towards paying employers for their current employees. The truth is that this scheme has no chance of getting even close to this projection, simply because it will create no new businesses. A business that could not get started without the youth subsidy will not start with it; it is too small. The youth employment subsidy will amount to little more than a subsidy to employers already employing low paid people between 18 and 29 years old. The DA’s agenda is to discredit Cosatu and the struggle for workers’ rights and to promote state support for business owners as the national priority.  [all figures quoted from the discussion paper of the National Treasury]

·         To make headway against the unemployment crisis the youth will need the fullest possible complement of rights, specifically the right to protest, as employers and politicians have proven that they will not simply listen to the demands of the youth. Cosatu’s decision to countermarch is of course perfectly consistent with democracy, but its threatening language and probable violence is certainly not. Yes, the DA is hell bent on intensifying the neo-liberal, anti-poor policies of the state, but the opponents of these policies cannot simply support the authoritarian and violent responses of Cosatu leaders to the DA’s march. When the social movements of the unemployed and the poor have mobilised against the neo-liberal policies of the ANC-led state and have criticised Cosatu for supporting the ANC, these movements have often faced very much the same type of responses from Cosatu members. Of course the DA will now bask in its supposed victimhood and try to claim the moral high ground with regard to the right to protest, but on this it actually has no creditability. In DA-run municipalities and in the Western Cape Province they have done everything in their power to undermine the right of working class and poor people to protest. Their authoritarian response to the symbolic occupation of Rondebosch Commons in Cape Town is just the most recent of the memorable occasions when the DA have deployed shooting and swinging police against peaceful protestors.

·         Cosatu by way of Zwelenzima Vavi has said that this conflict is a class struggle with the DA attacking the working class in the interests of the rich. They neglect to mention that the youth employment subsidy is not a proposal of the DA; it is a government proposal already budgeted for by the treasury. If the DA are fighting for the rich, as they indeed are, then so are the ANC government, which is in power partly because of the support of Cosatu. Cosatu is then helping to keep in power a government hostile to the working class and the poor.

None of this means that Cosatu and the DA are the same from the point of view of the unemployed youth. The DA represents the rich capitalist class that are mainly white – a class that wants to become even richer by exploiting the desperate jobless youth. Cosatu represents the black, older workers mostly in permanent jobs and, increasingly, also working professionals – these groups do not aim in this case to directly exploit the unemployed youth and often subsidise them in families. They are therefore potential allies. In this conflict, however, they are fighting for their own, not for the unemployed youth, much like the DA.

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