WFC/WFJ

The  DA’s Plan for Growth and Jobs

WORKING FOR CHANGE.

WORKING FOR JOBS.

28 July 2012

Click to this Link for full details of the Plan

South Africans are a wounded people. We’ve been traumatized by our past and remain frustrated by our present. This has stifled our capacity to reconcile with each other as citizens of a democratic nation. But reconciliation – the ability to extend trust beyond the narrow confines of our racial or social group – is the key to our future. It is the primary means by which we will be able to harness our greatest resource: human capital.
These were some of the thoughts that Mamphela Ramphele – one of our country’s most gifted academics, businesswomen and activists – shared with the Democratic Alliance parliamentary caucus recently. I had asked her to speak to us so that we might gain wisdom from her insights and experience, as I have done with other thought leaders from all walks of life.
But Ramphele’s frank discussion of black South Africans’ sense of woundedness has reminded us of how much work remains to be done before many South Africans feel that they have moved from victims to victors.
Our woundedness is often expressed in self-defeating ways. First, many of us cannot shake the feeling that we are somehow lesser than others.
However, we also know that this lingering sense of inferiority is unwarranted. It is the sad legacy of a lie that has been thoroughly discredited by our inspirational triumph over racism. The best anecdote to this feeling is very thing that it threatens: achievement. When we take the risk to act, and succeed, it is then we confirm to ourselves and others that we are worthy.
That is why education is so important, because it provides the means by which young people can confidently tackle the future, free of psychological fetters. Sadly, our public education system – where most black children go to school – plays just as much a role in limiting students’ opportunities as it does in expanding them.
The second, and perhaps ironic, sentiment that arises from our woundedness is a sense of entitlement. Our victimization acts as an emotional and moral claim to special considerations. We end up nursing our suffering so as to claim that we should enjoy greater rights, privileges, perks or access than others.
Again, this is fully understandable, and it makes intuitive sense when thinking of “balancing” things out. While this is useful for assuring that blacks achieve redress for the wrongs of the past, at a personal level it can be quite debilitating.
Entitlement is the haven of mediocrity, the place where innovation and ingenuity go to lie down. That’s the problem with an entitled mindset. It does not spur thoughtful or challenging responses to one’s circumstances, but relinquishes problem-solving to the state. It makes us passive and brittle, when we should be pro-active and open to new opportunities.
Lastly, our woundedness can make us brittle about failure. Rather than own up to the fact that we are not living up to our potential, we call for lower standards so that poor results end up being hailed as successes. This is what we’ve done with education, celebrating the mediocrity of students “passing” a test with a 30% mark. A key indicator of our maturity as masters – not victims – of our fate is that we can acknowledge our failures and make a plan for moving forward.
We do not want to forget the past, but we want to learn from it for the sake of the future. We do not want to deny that we have been damaged by apartheid, but that that experience by no means defines the fullness of who we are.
We – yet again – hold the key to our own liberation. We need to use that key to move from a state of victimhood to mastery of our environment and our lives.
Dr. Wilmot James is DA Federal Chairperson.

DA Youth Wage Subsidy Campaign

Youth Wage Subsidy FACTS

Key Facts:

-       Treasury estimates that the youth wage subsidy will help create 423 000 jobs for young South Africans.

-       The DA has been calling for the implementation of the Youth Wage Subsidy for ten years.

-       Both President Zuma and Finance Minister Gordhan have stated support for the youth wage subsidy in the State of the Nation Address and Budget Speech in 2010.

-       Since then, it has been stalled in NEDLAC by COSATU. Business, government and FEDUSA (SA’s second largest union federation) are for the youth wage subsidy, COSATU is the only roadblock to its implementation.

-       It will only cost government R5 billion over three years to implement the youth wage subsidy. The auditor general has found that government loses R30 billion to wasteful expenditure and corruption every year. If we cut down on this waste we can easily afford a R5 billion investment to create jobs for the youth.

-       The subsidy will be paid over to complying businesses in the form of a tax credit, and will therefore be administered by the SARS.

-       Employers who grow their labour force by employing people between the ages of 18 and 29 will be eligible to the wage subsidy.

-       The youth wage subsidy will only be relevant to those employees who earn less than R60 000 per annum. (therefore less than R5000 per month)

-       An employer will only be eligible for the subsidy for two years.

-       The subsidy will cover 50% of a beneficiary’s wage up to R2000 per month, after that it will cover a smaller proportion up to R5000 per month.

-       Projections indicate that it would cost the state R37 000 per new job created. This is much lower than other job-creation alternatives, like the expanded public works programme, which requires a R60 000 investment by government per job created.

-       Singapore had huge success with the Youth Wage Subsidy, halving their unemployment between 2003 and 2007 partly due to the implementation of a youth wage subsidy.

COSATU’s arguments:

1. COSATU’s argument is that the youth wage subsidy will create a two-tiered labour system, where the old get fired and the young simply get hired to replace them.
2. That this is essentially a hand-out to businesses and therefore cannot be justified.
3. That it will create distortions in the labour market.

Our counter-arguments:

1. The wage subsidy proposal can be written in such a way to safeguard those who are already employed; it will only be provided to those businesses who expand their workforce. Therefore, the two-tiered labour force concern is unfounded.
2. Current labour legislation would also not allow for people to be fired simply to be replaced by younger people. That is illegal and cannot happen.
3. Businesses treasure their experienced employees, so they would not simply fire them to replace them with inexperienced workers. That makes no economic sense. This plan will safeguard those already employed and make it easier for businesses to expand their workforce to include young people who struggle to find work otherwise.
4. This is not a hand-out to businesses. It is a plan that will help business to employ more people. It will reward businesses for employing more people and will help the unemployed by getting more people into jobs.
5. It will not cause problematic distortions. Treasury has conducted an in-depth study of the proposal and its possible outcomes and has found that it will have an overwhelmingly positive impact, helping to create 423 000 new jobs in three years.

Other important points:

1. This is not the be-all and end-all of our solution to youth unemployment, since there are millions of unemployed youth and this will only create several hundred thousand jobs, but it will get the ball rolling. We would implement labour market deregulation, incentivise private investments through special economic zones and get government to work better in order to grow the economy and create jobs for all in the long run.
2. COSATU are opposed to this, because they know it will be difficult to unionise these workers. COSATU’s primary objective is to increase union membership, not to increase the number of employed people. We are fighting to have more people employed, they are fighting to have more unionized members. That is why they are fighting against an excellent proposal that is clearly in the national interest.