SA ‘better off’ with youth wage subsidy

2013-05-06 16:46

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South Africa could do better with a youth wage subsidy than without, statistician-general Pali Lehohla has said.

“There is a problem of skills, a problem of experience and a problem of getting into a system,” Lehohla said in Johannesburg today.

“If this process (youth wage subsidy) solves those three things, I don’t know why it poses a problem.

“Of course it reduces salaries from those that are working and so on. But I think if one looks at the net end to society, I suspect a with-youth-wage-subsidy environment is a much better option for South Africa in the long term than a without-subsidy environment.”

Lehohla said unskilled and unemployed youth were unlikely to get jobs.

“The only time they will get an income is when they are reaching 65; when they get social pensions.”

The National Treasury has proposed the subsidy to encourage employers to hire unemployed young people. Cosatu is opposing the policy, saying it will not increase employment.

Earlier, Stats SA released figures of the Quarterly Labour Force Survey.

It showed unemployment increased by 100 000 people to 4.6 million, which put the unemployment rate at 25.2%.

Lehohla said 71% of the unemployed were between the ages of 15 and 34.

A total of 3.5 million (33.5%) of people between the ages of 15 and 24 were unemployed, and not in education or training during the first quarter of 2013.

Lehohla said not having the youth at school perpetuated joblessness. Government had to put more effort into keeping children at school and ensuring teachers did their work.

Unemployment could not be eliminated if the education system did not improve.

“It is not going to happen when teachers are not teaching. It is not going to happen when students pass at 30%. It is not going to happen when children learn maths literacy. It’s a pipe dream,” Lehohla said.

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