Feb. 4 (Bloomberg) -- South Africa’s ruling party and its labor union ally have agreed on a proposal to increase jobs for youths to help reduce a 25.5 percent unemployment rate.
Members of the African National Congress met with the Congress of South African Trade Unions today to discuss the plans that will be presented to the government, ANC Secretary General Gwede Mantashe told reporters in Johannesburg today.
Cosatu has opposed plans by the ANC to pay subsidies to companies hiring young, new entrants to the labor market, saying it will lower wages and threaten jobs for older, experienced workers. Mantashe didn’t give details of the proposals and Cosatu spokesman Patrick Craven declined to comment on the meeting.
“We want to do everything and anything to make sure that youths are absorbed into the labor force,” Mantashe said.
South Africa is struggling to create jobs as mining strikes and a slump in demand for manufactured goods from Europe curb exports and undermine growth in Africa’s largest economy. The jobless rate for South Africans aged 15 to 34 was 36 percent in the third quarter, according to Statistics South Africa.
While the government set aside 5 billion rand ($560 million) for a youth employment subsidy in last year’s budget, not much of that has been used, Mantashe said.
The unemployment rate probably increased to 25.7 percent in the fourth quarter, according to the median estimate of three economists surveyed by Bloomberg. The Pretoria-based statistics agency is scheduled to publish the data at 11:30 a.m. local time tomorrow.
The Reserve Bank last month cut its forecast for economic growth this year to 2.6 percent from 2.9 percent, compared with an estimated expansion of 2.5 percent in 2012. That’s less than half the pace of 7 percent a year that’s needed to meet a goal of cutting the jobless rate to 14 percent by 2020.
The ANC may also propose that the government make education an essential service, preventing teachers from striking, Mantashe said.
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