by Piet Coetzer, Stef Terblanche

Labour watch

Employment debate rages on

Sandile Zungu
Sandile Zungu.JPG
While medium- to longer-term economic prospects globally remain bleak, unemployment figures, with all the socio-political implications that go with it, they have become one of the major challenges faced by counties world wide. South Africa is no exception as a national debate on many fronts about the most productive policy options intensifies. 
On at least the front of so-called Temporary Employment Services (TES) or labour brokers, the debate seems to be heading in the direction of some national consensus or at least workable compromises. On others, like how to deal with specifically youth unemployment, the debate rages on.
Government has decided against an outright ban of labour brokers and, in the wake of the ruling ANC’s June policy conference, instead opted for tighter regulation. The Congress of South African Trade Unions (COSATU), which fought a bitter battle to have labour brokers banned completely, has conceded defeat in this battle.
This does not , however mean that the debate over the details of what is to be done to regulate the TES-sector is over.
In the mean time the Judge-President of the Labour Court, Dunstan Mlambo has given some indication (please link to “Unemployment” article) of what can be expected.
Speaking at the 25th annual  Labour Law Conference he, among others suggested that labour brokers be subjected to the core stipulations of the Labour Relations Act (LRA).
On the other hand a just released study commissioned by Centre for Development and Enterprise (CDE), among others comes to the conclusion that temporary employment services play a big and positive role in helping unskilled and inexperienced young people find employment.
TESfirms operate at a signi´Čücantly larger scale than comparable government programmes succeeding in finding work for more jobseekers at incomes comparable to the formal sector.
The research found that labour brokers were most useful to young, inexperienced workers and those whose link to the labour market was particularly tenuous. These services “may help bring excluded households and workers into the economy” making the economy more inclusive. 
As judge Mlambo however, pointed out in his speech, it is in respect to job security and fringe benefits that those placed by labour brokers are the most vulnerable. 
Youth employment subsidy
On the front of youth unemployment and the once mooted employment subsidy to bolster employment from this section of the population, the debate is rather heating up than moving towards a more consensual national approach.
The proposal for the introduction of a two-year subsidy for employers who take on first-time workers, made by the national treasury was originally supposed to have been implemented by April this year. It however, got stuck in negotiations at the National Economic Development and Labour Council (NEDLAC).
COSATU was strongly opposed to the subsidy, arguing it would give companies an incentive to let go of existing workers in order to employ subsidised ones.
Subsequently at its June policy conference the ANC, in response to proposals by the  National Youth Development Agency (NYDA) and its own Youth League, replaced the employment subsidy plan with an individual job-seekers grant as part of the comprehensive social security package.
According to a report by the South African Press Association (Sapa) last week there is far less enthusiasm for the job seekers' grant than there was for the employment subsidy.
Adcorp labour market analyst Loane Sharp, said it would have far less of an impact than the subsidy. 
"The change from the unemployment subsidy to a job seekers' grant involves such a totally different economic method of working that it's not clear that the ANC has identified the problem of unemployment correctly," she is quoted as saying.
Black Business Council (BBC) spokesman, Sandile Zungu, reserved final judgement on the grant option, but said the BBC saw immediate benefits to the wage subsidy, while the advantages of the grant were not clear.
The BBC was in favour of the youth wage subsidy as it "had an inherent motivation for business to come to the party and an immediate benefit to young people getting some experience whilst not necessarily in full employment," he said.
Rather than creating jobs, the job seekers' subsidy might just teach the youth to queue.
"The youth must wake up at 4am and go to work, not wake up to go and queue," Zungu said.
Both Sharp and Zungu also questioned the sustainability of the grant while economist Mike Schussler said “the youth employment subsidy may at least create some jobs... but nobody knows at the moment what this thing [grant] is."
The details of the job seekers' grant is to be fleshed out at the ANC’s national conference in Mangaung in December this year. 
Politicised 
In the mean time the unemployment, including the question of youth unemployment, scene in the country has become even more politicised with the official opposition in Parliament, the Democratic Alliance (DA) launching its own “Jobs Campaign.”
In a statement released by DA leader and Western Province premier, Helen Zille last week SAID the ANC's proposed job seekers' grant won't create jobs, claiming it was merely  “a holding pattern designed to keep the ANC alliance partners happy until Mangaung is over.”
ANC member of the Western Cape provincial legislature, Max Ozinsky, in turn accused the DA of overseeing jobless growth in the province. 
In his speech at the Labour Law Conference judge Mlambo warned warned that unless the depressing unemployment figures are turned around, “we may face yet another revolt from the youth that may lead to instability of the kind manifested by the Arab Spring revolt”.
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