Job-seekers' grant can be part of overall strategy
Youth unemployment is getting worse, so let's not dismiss last week's ANC proposal of a job-seekers' grant too quickly - especially since no one gave any detail of what this new category of social security might entail.
The first important consideration is that it would break one of the fundamental rules of South Africa's social welfare system. The government has since 1994 resisted any form of direct grant to working age people capable of doing a job.
The Unemployment Insurance Fund offers some cover to people who lose a job, but it is a mutual fund built on contributions from workers and not a state grant.
We have no form of state-funded unemployment benefit. We pay grants to children under the age of 18 whose caregivers have little or no income, to disabled people, war veterans and, at a ceiling of R1220 a month, those over the age of 60 - but not to able-bodied people aged between 18 and 59.
If the proposed grant is to be anything like its name suggests, it would for the first time put cash into the hands of people capable of working who have been unable to land a job. That is a threshold we should cross with care because once that is done we would forevermore be in new territory with undefined boundaries. We could then arguably be called a welfare state.
Jeff Radebe, the ANC policy chief, said after last week's conference that the job-seekers' grant would not replace the R5-billion youth wage subsidy proposed by the government to have started on April Fools' Day this year, but which is still stuck in Nedlac, where the government, business and labour are supposed to resolve their differences.
So, if Cosatu can ever be persuaded to sanction something that is not in its own direct interest, that initiative is still available. According to the National Treasury's proposal, the two-year subsidy to employers who take on first-time workers could create 178000 net new jobs at a cost of R28000 each.
While the Youth Wage Subsidy is premised on the need to create new jobs, however, the job-seekers' grant appears to assume there are jobs out there that young people could have if they could just find them. That is true, but only to a very limited extent.
The handful of jobs on offer generally require some level of skill that is scarce either across the country or in the area where the vacancy exists. But those jobs would absorb only a tiny fraction of the 1.2 million people aged 15 to 24 who are actually looking for work. In fact, as school leavers have continued to swell the number of young people looking for work since 2008, more than 350000 people in that age group have lost jobs they briefly held.
The number of job seekers under 35 - the government's definition of "youth" - is put by the Treasury at three million, with another 1.3 million too discouraged to look for work. It is unlikely existing vacancies would absorb more than 100000 of these young people who need a job.
The challenge of finding a job varies greatly in different areas of the country. It could be as simple as the cost of transport from a very rural homestead to a village with an internet cafe and pay telephones.
But it is likely for most job-seekers to include the price of a few newspapers every week, a decent set of clothes, access to a word processor, copier and fax machine and food and accommodation during what is likely to be a long search.
A job-seekers' grant, equivalent to the current child support grant of R280 a month, for the 1.2 million under-25s actively looking for work would cost just over R4-billion a year - the price of two Boeing 777s for the president.
If it were to be effective, that sounds like a reasonable initiative to complement the youth wage subsidy. But it would have to be managed and policed if it were to be anything other than another level of social welfare for people unable to earn a living. For a start, the grant would have to be directly linked to evidence of a search for work and, without a network of government-funded job centres, it is hard to imagine how that could be arranged in this country.
Since the skills deficit among these mainly township-schooled young people is probably the single greatest obstacle to employment, a link to training should be built in, too. In Britain and some former Soviet bloc countries where a job-seekers' allowance does exist, it is limited to a maximum of six months and dependent on credible proof every 14 days of an active search for work.
This country's child support grants are theoretically linked to evidence of school attendance, but it has been impossible to apply that condition - or even to ensure that the money actually benefits the child in whose name it is issued.
The existing R104-billion-a-year burden of social welfare has sustained life for millions and it has not broken the South African economy yet, but President Jacob Zuma and his ministers rightly warn that it could. At this point, 6.2 million people earn enough to pay personal taxes and 16.5 million draw some form of government grant.
Just over a quarter of a million people - 4.5% of active taxpayers - earn 21.2% of the country's taxable income and pay 37.3% of the personal taxes collected.
Perhaps they can take a little more pain in the interests of getting more South Africans working in an accelerating economy, but we must be getting close to the threshold.
A well-designed and rigorously policed job-seekers' grant could be an additional tool to grow employment if it is applied within a multi-pronged strategy that acknowledges that it is ultimately only a growing economy that grows jobs.