Hon House Chairperson, Ministers and Deputy Ministers, colleagues, ladies and gentlemen, maybe it would help, Mr Bhanga, if you stop being too personal and deal with the issues of the topic at hand. We understand now why you don't have a leadership. [Interjections.] It is because you don't hold discussions. I want to confirm that in the ANC we do hold discussions. [Interjections.]
In 2007, the ANC noted that market failures and other institutional weaknesses meant that many of those with higher than average skills are unable to find employment. This is the ANC. The large number of unemployed graduates is a case in point. We suggested that programmes for the youth should primarily seek to give them training and experience to access the formal economy. [Interjections.]
In February 2011, the Ministry of Finance released a discussion document entitled "Confronting Youth Unemployment - Policy Options for South Africa". [Interjections.] It is a discussion document and you are free to comment on it. The discussion document argued that amongst the reasons for youth unemployment is the fact that employers look for skills and experience and they regard unskilled, inexperienced job seekers as a risky investment. [Interjections.]
It - that is, the Treasury document - argues for the implementation of a youth subsidy based on the following reasons: To reduce the risk of employing a person whose productivity is unknown; to render the training of young workers more affordable for employers; and to encourage more active job searching by unemployed youth.
As the ANC, we feel that there are six fundamental questions that would need to be addressed in the determination of the future policy. These are: whether it will have an effect on employment, in particular, the substitution or displacement factor; whether it has an effect on the alleviation of poverty, its impact on bargaining council agreements, including the risk of driving wages down; the substitution of organised labour, especially in the vulnerable sectors; whether it resolves the two- tier labour market system or deepens its contradiction; and what the best way is for young workers to enter the labour market for the first time.
In our recent policy conference we discussed and agreed, among others, that urgent and extraordinary measures were required to address youth unemployment. Some of the proposals on the table include those contained in the National Youth Development Strategy, a tax credit to incentivise youth employment, the provision of training subsidies and a youth work seekers grant. All these proposals aim to bring new entrants into the workplace while still protecting the jobs and conditions of existing workers. This is the ANC leading. [Interjections.] The challenge of youth unemployment that the policy must address ... South Africa has an acute problem of youth unemployment, which we all know about. We also know that it also requires a multipronged strategy to raise employment and support inclusion and social cohesion. High youth unemployment means that young people are not acquiring the skills or experience needed to drive the economy forward. This, in turn, inhibits the country's economic development and imposes a larger burden on the state to provide social assistance.
The salient facts about youth employment can be summarised as follows: About 42% of young people under the age of 30 are unemployed compared with less than 17% of adults over 30. Employment of 18- to 24-year-olds has fallen by more than 20% since December 2008. That's a global phenomenon; it's not only true of South Africa. [Interjections.]
Latest statistics reflect official unemployment figures at 25%, which is 4,3 million people. Of this number, approximately 1,2 million and 1,8 million fall in the categories 15 to 24 and 25 to 34. It is predominantly cyclical and is plagued by chronic structural unemployment linked to historical factors such as poor access to quality education and skills development. [Interjections.] By global comparison, youth unemployment is two to three times as high as unemployment for older workers. The problem in South Africa is that the overall rate of joblessness is still too high and that means horrific unemployment rates for young people, we agree with that.
The International Labour Organisation, ILO, has rightly labelled this a global crisis - pointing to what the Minster has alluded to - as 75 million young people worldwide are looking for work. It calls for coherent and co- ordinated interventions on youth employment with an integrated approach that combines macroeconomic policies and targeted measures that address labour demand and supply, as well as the quantity and quality of employment.
Young people are differentially affected by high unemployment. Access to employment, the level at which young people enter the labour market as well as long-term employability are defined along racial and class lines. The reality is that it is mostly black and female youth that is disproportionately affected by unemployment.
Where there is entry into the labour market, it is often oriented towards low wage and low-skilled positions ...