DA welcomes textile wage deal, but why does Cosatu still oppose a wage subsidy?
The Democratic Alliance (DA) welcomes the special wage deal between the South African Clothing and Textile Workers' Union (SACTWU) and textile sector employers to lower the cost of hiring new workers in that sector. This plan genuinely seems to place the interests of unemployed South Africans first and we support any initiative to lower the cost of hiring new workers (see Business Day report).
Wage reforms targeted at lowering the cost of hiring new workers do, however, have to shift the cost onto someone. In this regard it is interesting to note that it was a Cosatu-affiliated union, SACTWU, which brokered this deal, as this is a deal that lowers the cost of hiring new workers by imposing that cost on those new workers, through lower salaries.
There is another proposal on the table in the form of the Youth Wage Subsidy which aims at lowering the cost of hiring new workers by shifting that cost to government in the form of a subsidy. Bizarrely, Cosatu opposes this proposal.
This means that Cosatu is opposing a plan to shift the cost of hiring new workers to the government, while a Cosatu-affiliated union has just brokered a plan to shift the cost of hiring new workers onto the workers themselves!
Cosatu should therefore come out and clarify its position on some key issues:
- Does it support this agreement between the textile industry and its affiliate, SACTWU?
- If so, why does it support this agreement, and not the Youth Wage Subsidy?
- Would Cosatu support expanding this agreement to other struggling sectors as well?
Responsibly lowering the cost of hiring new workers is an important prerequisite to achieving higher job growth in South Africa. We therefore enthusiastically welcome this agreement and hope that this approach can be replicated. We are concerned however, that there is a serious contradiction in Cosatu's position and we call on them to resolve this by ending their opposition to the Youth Wage Subsidy in order to pass it through Nedlac and into implementation on 1 April 2012.
Statement issued by Tim Harris MP, DA Shadow Minister of Trade and Industry, October 6 2011
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