http://www.engineeringnews.co.za
  SEARCH
Login
R/€ = 13.53Change: 0.03
R/$ = 12.26Change: -0.01
Au 1168.21 $/ozChange: -3.55
Pt 1083.00 $/ozChange: -5.50
 
 
Note: Search is limited to the most recent 250 articles. Set date range to access earlier articles.
Where? With... When?








Start
 
End
 
 
And must exclude these words...
Close Main Search
Close Main Login
My Profile News Alerts Newsletters Logout Close Main Profile
 
Agriculture   Automotive   Chemicals   Competition Policy   Construction   Defence   Economy   Electricity   Energy   Environment   ICT   Metals   Mining   Science and Technology   Services   Trade   Transport & Logistics   Water  
What's On Press Office Tenders Suppliers Directory Research Jobs Announcements Letters Contact Us
 
 
 
RSS Feed
Article   Comments   Other News   Research   Magazine  
 
 
Aug 06, 2012

Doubt about job seekers' grant

Back
Mangaung|Adcorp|Africa|BBC|Education|SECURITY|System|Water|Africa|South Africa|Herman Mashaba|Loane Sharp|Mike Schussler|Sandile Zungu|Water
|Africa|Education|SECURITY|System|Water|Africa||Water
mangaung-city|adcorp|africa-company|bbc|education-company|security|system|water-company|africa|south-africa|herman-mashaba|loane-sharp|mike-schussler|sandile-zungu|water



The ANC's proposed job seekers' grant has been met with far less enthusiasm than the abandoned youth employment subsidy.

"The job seekers' grant will have nowhere near the impact the youth wage subsidy would have had," said Adcorp labour market analyst Loane Sharp.

"The change from the unemployment subsidy to a job seekers' grant involves such a totally different economic method of working that it's not clear that the ANC has identified the problem of unemployment correctly."

The African National Congress resolved at its June policy conference to include a job-seekers grant as part of the comprehensive social security package, in response to submissions by the National Youth Development Agency and the ANC Youth League.

The party has shown no appetite for the youth wage subsidy put forward by National Treasury last year in an attempt to alleviate the high youth unemployment rate.

Treasury estimates that unemployment among those under the age of 25 years old is about 50%, accounting for 30% of total unemployment.

The two-year subsidy for employers who take on first-time workers could create 178 000 net new jobs at a cost of R28 000 each, Treasury said.

The subsidy was meant to be put into effect in April this year, but had been stuck in negotiations at the National Economic Development and Labour Council.

The ANC's alliance partner, the Congress of Trade Unions, was strongly opposed to the subsidy, arguing it would give companies an incentive to let go of existing workers in order to employ subsidised ones.

Sharp said the grant would subsidise the cost of recruitment, which was unnecessary as South Africa has a very well-functioning informal industry recruitment system.

"Unemployment is a function of the cost of employment, not the cost of recruitment... The subsidy will not make job seekers any more desirable to job givers."

The youth wage subsidy, however, could have created over 500 000 jobs.

"Our own estimates suggest that National Treasury was very conservative in estimating the number of new jobs that would be created," said Sharp.

"We believe employers are much more sensitive to employment costs than the Treasury."

He said it was pity that the subsidy had seemingly been abandoned as it would have shown the trade unions that employment is "wage sensitive".

"It would demonstrate, almost in an experimental way, just how sensitive employment is to wages... which has been disputed in the trade union movement."

Black Business Council (BBC) spokesman Sandile Zungu also saw immediate benefits to the youth wage subsidy, while the advantages of the grant were not clear.

"As the Black Business Council... we are waiting for details of how they envisage doing it."

The BBC was in favour of the youth wage subsidy as it "had an inherent motivation for business to come to the party and an immediate benefit to young people getting some experience whilst not necessarily in full employment".

Zungu said the proposed grant raised important questions:

-- Is it going to encourage business to employ youth?

-- Will it create an incentive for the unemployed to pull up their bootstraps and continue to look for work?

-- Will it strengthen or weaken the state's coffers in the long-term?

-- Who is going to pay for it given that the South African tax base is limited?

Zungu suggested labour's valid concerns about the subsidy leading to job losses among older workers should have been addressed, rather than abandoning the scheme altogether.

"Instead they threw out the baby with the bath water. We did a face exchange instead of treating the warts and pimples."

Rather than creating jobs, the job seekers' subsidy might just teach the youth to queue.

"The youth must wake up at 4am and go to work, not wake up to go and queue," Zungu said.

Sharp and Zungu both questioned the sustainability of the grant.

Sharp said according to Adcorp figures, the average time spent searching for work is 806 days, while South Africa has around 6.5-million unemployed or discouraged work seekers.

Multiplying 6.5-million by 806 days, amounts to just over 5.2 billion days for which work seekers would need to be subsidised, making the grant "fiscally impossible".

Treasury had set aside R5-billion over three years for the subsidy. The job seekers' grant had not yet been costed.

Herman Mashaba, chairman of the Free Market Foundation, took a different view.

"I don't really believe that giving grants is going to arrest our high employment, given our restrictive labour legislation," he said, referring to both the youth employment subsidy and the job seekers' grant.

"You can't, on the one hand, treat employers as enemies of the people then, on the other hand, expect them to give jobs."

He said if government was serious about arresting high unemployment, it should introduce less restrictive labour legislation.

"If you bring in a subsidy to encourage entreupreneurship and to encourage economic activity it could work, but not with our current punitive labour legislation."

Economist Mike Schussler said given the high unemployment, the country could not be seen to do nothing.

Broad employment figures for the first quarter of the year showed about 7.3-million people were employed full-time in the formal sector, while about 7.75-million people, including discouraged work seekers, are unemployed.

"I don't know of any countries, outside of war zones or those involved in civil war, to have more people unemployed in broader terms... than employed," Schussler said.

The unemployed therefore make up double the number of the some four-million workers belonging to trade unions, he said.

"So for the politicians, they have to be seen to do something."

However, he did not see the job seekers' grant solving the country's unemployment problem.

"The youth employment subsidy may at least create some jobs... but nobody knows at the moment what this thing [grant] is."

Schussler said it would probably make more of a difference to fix the education system, re-examine the labour laws, give farmers confidence in their tenure, and encourage miners to mine, among others.

Zungu warned it was too soon to judge the job seekers' subsidy.

"We may be jumping the gun, they may have a genie in the bag which, once put on the table, we may engage and say, what a smart way out of the quagmire."

The proposal will be fleshed out at the ANC's national conference in Mangaung in December.

Edited by: Sapa
Comment Guidelines (150 word limit)
 
 
 
 
 
 
 
 
Other Labour and Skills Development News
Mike Rossouw
The time had come for the private sector to start making it clear that it wished to work with government to simplify mining policy and collaborate towards less regulation and greater implementation. “Step up and get involved in providing meaningful information and...
State-owned aerospace and defence technology conglomerate Denel on Tuesday launched a book to demystify defence technology to South African learners and attract them to the defence industry’s career opportunities, while creating greater awareness about innovation and...
Article contains comments
More
 
 
Latest News
Speciality chemicals group Lanxess on Wednesday appointed its South African CFO Ben Marais as country representative and MD. Marais, a qualified South African chartered accountant, completed his articles with international accounting firm Deloitte. Over the years, he...
Economic Development Minister Ebrahim Patel
Some four years after the signing of the Local Procurement Accord, which sketches government’s intention to achieve a 75% localisation spend in the procurement of goods and services, Economic Development Minister Ebrahim Patel has described government’s greatest...
National carrier South African Airways (SAA) and Air Mauritius have concluded an agreement that will see a broadening of their codeshare agreement to enhance greater connectivity between the continent, South Africa, Mauritius and other intercontinental routes. “The...
More
 
 
Recent Research Reports
Real Economy Year Book 2015 (PDF Report)
There are very few beacons of hope on South Africa’s economic horizon. Economic growth is weak, unemployment is rising, electricity supply is insufficient to meet demand and/or spur growth, with poor prospects for many of the commodities mined and exported. However,...
Real Economy Insight: Automotive 2015 (PDF Report)
Creamer Media’s Real Economy Year Book comprises separate reports under the banner Real Economy Insight and investigates key developments in the automotive, construction, electricity, road and rail, steel, water, gold, iron-ore and platinum sectors.
Real Economy Insight: Water 2015 (PDF Report)
Creamer Media’s Real Economy Year Book has been divided into individual reports under the banner Real Economy Insight and investigates key developments in the automotive, construction, electricity, road and rail, steel, water, coal, gold, iron-ore and platinum sectors.
Real Economy Insight: Construction 2015 (PDF Report)
Creamer Media’s Real Economy Year Book has been divided into individual reports under the banner Real Economy Insight and investigates key developments in the automotive, construction, electricity, road and rail, steel, water, coal, gold, iron-ore and platinum sectors.
Real Economy Insight: Electricity 2015 (PDF Report)
Creamer Media’s Real Economy Year Book has been divided into individual reports under the banner Real Economy Insight and investigates key developments in the automotive, construction, electricity, road and rail, steel, water, coal, gold, iron-ore and platinum sectors.
Real Economy Insight: Road and Rail 2015 (PDF Report)
Creamer Media’s Real Economy Year Book has been divided into individual reports under the banner Real Economy Insight and investigates key developments in the automotive, construction, electricity, road and rail, steel, water, coal, gold, iron-ore and platinum sectors.
 
 
 
 
 
This Week's Magazine
JSE-listed Afrimat will make a cash offer to acquire the entire remaining issued share capital of subsidiary Infrasors that it does not already own.
TEAMWORK Aggreko Europe, Middle East & Africa MD David Taylor-Smith; Aggreko Zambia chairperson Dr. Sixtus Mulenga; Aggreko Africa MD James Shepherd
Temporary power generation services provider Aggreko announced earlier this month that it had appointed Dr Sixtus Mulenga as nonexecutive chairperson of Aggreko Zambia, a move it believed was integral to the ongoing expansion of its operations in Zambia and the rest...
Major global aircraft manufacturer Airbus Commercial Aircraft is maintaining a steady course. "I don't have any big news, good or bad," company President and CEO Fabrice Brégier told international aviation journalists in Toulouse, France, at the company’s recent...
MEASURING DEVICES Bosch has released a mobile app that enables the measurements made with measuring devices to be sent and used directly on the app for accuracy and on-site quoting
Industrial tool manufacturer Bosch has increased the compatibility of many batteries in its range of blue industrial power tools and has released mobile-device applications (apps) for users of the tools, says Bosch South Africa training manager Peter du Bruyn. Many...
The new Nissan Navara has been launched onto the global market, but Nissan South Africa (NSA) will only know in August whether the local Rosslyn plant will assemble the one-ton pickup. The NSA plant currently produces the old NP300 Hardbody one-ton bakkie, as well as...
 
 
 
 
 
 
 
 
 
Alert Close
Embed Code Close
content
Research Reports Close
Research Reports are a product of the
Research Channel Africa. Reports can be bought individually or you can gain full access to all reports as part of a Research Channel Africa subscription.
Find Out More Buy Report
 
 
Close
Engineering News
Completely Re-Engineered
Experience it now. Click here
*website to launch in a few weeks
Subscribe Now for $96 Close
Subscribe Now for $96