Although it has created some political controversy, the ‘youth wage subsidy’ has now been put in place through the Employment Tax Incentive Act No 26 of 2013 (‘the Act’), which came into effect on 1 January 2014.
youth wage subsidy
Statistics South Africa (Stats SA) says that South Africa could do better with a youth wage subsidy than without.
Stats SA statistician general, Pali Lehohla, points out that there is a problem of skills, experience and of getting into the system in the country.
The International Labour Organisation (ILO) believes South Africa should immediately introduce the youth wage subsidy - in some sectors of the economy - to test if it would yield results.
IOL deputy director for Decent Work Team for Southern and East Africa, Joni Musabayana, points out that, the youth wage subsidy was successful in many countries.
Musabayana says as part of its ‘decent work’ campaign the ILO is working with government to turn job opportunities in the Extended Public Works Programme (EPWP) into productive jobs.
According to an editorial on the Business Day website, job seeker’s grant cannot substitute for measures that make it easier for businesses to create jobs, or replace improving skills and education or labour market reforms as policy.
It says it the proposed youth wage subsidy is to be swept aside and replaced with a job seeker’s grant, it will be a tragedy for business, the unemployed and the fiscus.
It further argues that ‘another grant’ will not solve the problem of unemployment, and it will run a real risk of pushing state expenditure up to an unsustainable level.