‘The callousness of Cosatu is breathtaking’

ON Tuesday, Helen Zille led the DA on a march to Cosatu House to peacefully protest against the labour federation’s blocking of a youth wage subsidy. We were, as you may have seen on television, met with violence, rocks and insults.

However, the DA is not turning back because the poor and unemployed are looking to us to fight their corner. Nor have we have ever been scared of bullies. Leadership can be dangerous.

The callousness of Cosatu is breathtaking. After ascending the ladder of opportunity themselves, Cosatu leaders kick away the ladder for everyone else. Listen to Cosatu general secretary Zwelinzima Vavi being interviewed, and what do you notice? He never talks about what the millions of unemployed young people are meant to do.

Unfolding directly from this, Cosatu is on the wrong side of the constitution. The animating driver of the constitution is that no group in South Africa can or should prosper at the expense of another group. For the DA, our work is not done until every young person enjoys the dignity of an honest day’s work.

This is what I hear when I talk to young people up and down the country. They are stirred less by partisan indignation and more by what we – politicians, government, business and trade unions – are going to do to help them. South Africa’s youth need access to opportunities now – opportunities to gain skills and to become independent. Businesses also need opportunities to recruit the people they need.

There is growing, and almost complete consensus, at the highest level of government, that a youth wage subsidy is necessary to fight the high levels of youth unemployment and that it should be implemented as soon as possible.

Minister of Finance Pravin Gordhan and Deputy President Kgalema Motlanthe have addressed Parliament on the need for the policy to be implemented. It is a simple, easy-to-implement, incentive-based policy. The government does not, as has been suggested by some, give the employer money. The employer simply receives a tax rebate for employing a young person.

Cosatu’s stubborn opposition to the subsidy, and the continued delay in its implementation, point to a growing and inherent contradiction in the labour federation. Cosatu is increasingly isolated in its opposition among its own friends and allies. Nedlac has had plenty of time to debate and consider the policy.

On the one hand, Cosatu agrees with the DA. The federation opposes corruption, and programmes like e-tolling in Gauteng, which hurt the poor the hardest. We also share many other concerns from corruption to ANC cadre deployment in the public service. But on the other hand, Cosatu vehemently opposes a policy which would benefit an estimated 423 000 jobs for young, unem- ployed South Africans.

Bar Cosatu’s opposition, the plan enjoys widespread support. This is not, nor should it be, a left-right ideological argument.

A solid academic research study of South Africa’s market imperfections makes the case for a youth wage subsidy. Unemployment is clustered among younger workers. A Harvard study strongly supported a youth subsidy in South Africa to address the structural conditions which produce persistent youth unemployment.

Helen Zille and the DA have never said that the youth wage subsidy is an economic panacea. If the youth wage subsidy was introduced, the structural problems of South Africa’s education system and labour market will still need to be addressed. Surely Cosatu agrees with the DA that the challenges South Africa faces can be fixed at the intersection of education and the economy. South Africa simply does not have the time to delay implementing the subsidy policy. Trade unionists, like Cosatu’s leadership, will know that over time human capital tends to depreciate when it is not used. If Cosatu is not going to support a youth wage subsidy, what exactly does the federation propose? Are there any amendments that could be made that would address Cosatu’s concerns?

Cosatu spuriously claims that it opposes the subsidy because it gives employers large amounts of money to hire young employees. Thus, this could make companies retrench older workers in a bid to increase profits. To date, Cosatu has not provided any empirical data to support this. There is enough existing regulation and legislation to mitigate such an outcome.

However, it is the very nature of businesses to seek out and retain skilled or experienced workers over those who are unskilled and inexperienced. The express purpose of this subsidy is for businesses to take up new workers in addition to them.

Obviously, the subsidy would need to be set at a level to incentivise business, not insulate it from the market. Even austeritystricken Britain has implemented a version of such a subsidy. It was a precondition of the Liberal Democrats’ participation in the coalition government.

The DA remains committed to engaging all parties, including Cosatu, on a youth wage subsidy so that a solution to this impasse can be found.

We will continue to fight the campaign. The millions of unemployed young South Africans deserve nothing less.