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Andile Ntingi

THE country’s labour unions have vowed to fight off a radical proposal that could drastically strip young workers of their rights and strengthen the might of capitalists.

The bold proposal, made by a Harvard-dominated international panel of economists, is recommending that young workers be given a wage subsidy but at the same time employers be allowed to fire them without explanation during their probation period.

The recommendation, made by the 30-person panel, is aimed at dealing with the high levels of unemployment, particularly among young black workers in the age range of 20-35 years.

In this age category about 33% of unemployed are Africans, 20% coloured and 18% Indian. Only 5% of white people in this age category are unemployed.

The labour market policy proposal is among 21 recommendations put forward by the panel which are aimed at turning South Africa into an export-driven economy that generates sustainable economic growth and jobs.

The recommendations were released this week by the National Treasury, which together with the Presidency commissioned the research, resulting in 19 papers being compiled.

The papers identify a myriad of economic growth constraints and remedies for the inhibitors.

One of the key findings by the international economists was that 42.6% of working-age South Africans had jobs.

Other countries at a similar stage of development have employment rates of around 65%.

If the employment rate in South Africa was to rise to 52%, about 6.6 million jobs would be created, the international economists say.

In 2005 another radical labour proposal aimed at cutting high youth unemployment was shot down by the ANC’s alliance partners, Cosatu and the SA Communist Party.

The proposal, crafted by Deputy Finance Minister Jabu Moleketi, called for a dual wage system in which young workers earned less than the prevailing wage agreements. Labour viewed this as an attempt by capitalists to exploit young workers, and rejected it. Cosatu, which could not be reached for comment on Friday, is expected to oppose any proposal that promotes low wages and makes it easier to fire young employees.

Joseph Maqhekeni, the deputy president of the South African Confederation of Trade Unions (Sacotu), said the country’s second biggest union would fight the proposal as it could result in widespread exploitation of young workers.

“If you subsidise them it means you disagree with the notion that young workers must be paid low wages. As workers we do not agree with this. Why can’t young workers be given good salaries, because they are productive like everybody else?” he asked.

Mandla Maleka, Eskom chief economist, expressed alarm at the proposal by the international panel, headed by Harvard University economists Ricardo Hausmann and Dani Rodrik.

“The last thing that government wants to do is allow the extreme liberalisation of the labour market. If we allow this we will be going too far. Instead of focusing on making it easy to fire young workers, we should be concentrating on building an educated and productive work force,” Maleka said.

National Treasury director-general Lesetja Kganyago said the department had released the recommendations so that the South African public could debate them.

“We have released the recommendations to allow the public to engage and see which we agree or disagree with,” said Kganyago.

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