Why does COSATU oppose the Youth Wage Subsidy?

COSATU's opposition to the Youth Wage Subsidy is based primarily on the fear that older, unionised members will be substituted for younger, cheaper workers.

This fear is unfounded.

Labour legislation in South Africa means that companies will not be able to retrench older workers just to replace them with younger ones. When an employer wants to retrench or fire, they need to be able to justify it in terms of the Basic Conditions of Employment Act.

It would not make business sense to replace good, experienced workers who have a proven track record of productivity with young, inexperienced workers.

COSATU also sometimes says that South Africa does not have the money to subsidise companies.

Not only has the money for the Youth Wage Subsidy already been budgeted for, but it is the most efficient way to create jobs for young people. Here are the costs to the state, per job created, for the following:

• Youth Wage Subsidy: R37 000
• Expanded Public Works Programme R60 000
• R9 billion Jobs Fund: R60 000
• Industrial Development Zones: R160 000
• Automative Subsidies: R200 000