Wage Subsidy: DA Youth announces campaign launch
Today the DA Youth is launching our campaign for the introduction of a wage subsidy targeted at young South Africans. We will be mobilising young people across the country to support this campaign in coming weeks by signing a petition that we will hand over to the Presidency.
The petition can be signed online.
The high cost of hiring labour in South Africa is the key reason why 3.1 million South Africans aged 15-34 were unemployed in the first quarter of 2010. The DA Youth proposes the subsidy of wages of first-time entrants to the market in order to lower the effective cost of employment without adjusting wage levels in order to create hundreds of thousands of jobs without an adjustment of wages or conditions of employment.
In addition to creating jobs, a wage-subsidy acts as an incentive for on-the-job training. Firms are rewarded for hiring, and they reward themselves by ensuring that those hired are also adequately skilled. The system acts as a powerful remedy to unemployment, by prioritising labour-intensive production and by getting the market to take care of providing skills, rather than the state. This proposal constitutes a significant and necessary departure from the ANC's SETA-based approach.
Our particular wage subsidy proposal is straightforward: Every time a company or person hires a first-time entrant to the market, the business or individual doing the hiring is eligible to receive a R300 monthly deduction from their monthly PAYE payments. Or, for businesses with fewer than 50 workers, deductions from their tax submission to SARS. For every additional person hired, another R300 deduction can be claimed. In short, the policy works as a hiring incentive to companies.
It is dismaying that certain other youth organisations are lobbying against the introduction of wage subsidies - a proposal that is backed by Finance Minister Pravin Gordhan, and the Harvard Panel that looked at economic policy solutions in South Africa.
The DA Youth believes that opposition to the introduction of wage subsidies is opposition to the alleviation of poverty and the expansion of opportunity. South Africa's youth, as one, need to tell Mr. Gordhan not to be deterred - and to introduce a wage subsidy programme immediately.
Statement issued by Makashule Gana, Democratic Alliance Federal Youth Leader, October 24 2010
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