All eyes will be on Finance Minister Pravin Gordhan as he presents his Budget Speech that is expected to address challenges facing South Africa twenty years into our democracy.
Most South Africans believe that our economy should provide decent employment opportunities in conditions of freedom, equity, security and human dignity, in line with the International Labour Organisation’s (ILO) Convention on Decent Work. Moreover, the creation of decent jobs is also a central part of the ANC’s Polokwane resolutions of 2007 and its 2009 election manifesto upon which the electorate invested its vote in a social contract with the state. Indeed, when the focus of the country is on getting the economy back to life again, the stability and dignity of the work force are especially vital.
That is why this budget speech is expected to take a cue from the recent state of the nation address in which President Jacob Zuma sent a strong message to the mining sector to resolve the protracted wage disputes that are threatening the competitiveness and survival of the industry.
Early in this administration’s term of office, the minister’s budget speech made bold promises about progress towards job creation, only to see the alliance partners refuse to go along particularly on the issue of youth wage subsidy. On the other hand, Gordhan’s pledges to the nation about new and tougher rules governing the banking system have largely come to pass.
Since his previous announcements that government is going ahead with infrastructure spending on roads, railway lines, electricity power stations to boost the mining industry and related sectors, as well as the introduction of the Employment Tax Incentive Bill, the debate on job creation has taken a new twist that is charged with electioneering.
The youth wage subsidy is aimed at encouraging employers, through tax incentives, to take on young people aged from 18 to 29. However, since being exposed to exploitation practices of young people participating in the private sector internships and the public sector’s Expanded Public Works Programme (EPWP), details on how this budget will stimulate the creation of decent jobs could be the residing place for the ‘devil’.
This is so because the planning and legal apparatus of the state has the power to determine the difference between job opportunities and decent jobs, to determine what is informal economic activity and what is not, and to determine which forms of informality will thrive and which will disappear, including determining the flows of labour to the local industries that constitute life at the bottom of the urban economy.
The rash of illegal, exploitative situations has destroyed any notion that internships, EPWP work opportunities, and even the best of what is likely to come with this Employment Tax Incentive law are inherently “win-win”
What can we learn from the current exploitative practices in the private sector internships and the public sector’s EPWP that could provide a measurement standard for priorities of this budget speech?
Just recently, I was arguing about the labour movement with a thoughtful, liberally minded university friend of mine, who remarked: “Unions were useful back in the 1900s, you know, to get kids out of the mines. But aren’t we beyond that?”
We are beyond children working in mines. But that’s not because mine executives have softened. It’s because of the labour movement’s legislative victories in the first half of the 20th century, victories that radically reshaped the way we work and think about work. In recent years, though, that vision has frayed.
The damage is everywhere. Gordhan told Parliament when he introduced the Bill that, “the incidence of unemployment is highest among young people. This means [they] are denied the opportunity to gain skills and experience that will enable them to build future careers.” Indeed, the entry-level job is fast becoming an endangered species. A whole generation of twenty-somethings feels adrift — crushed by university and consumer debt, living with their parents, delaying traditional milestones of adulthood, unable to become independent stakeholders in society. Meanwhile, in some sectors of the economy the labour of underpaid young people has quietly replaced or displaced untold thousands of adult workers. Lucrative and influential professions — politics, media and entertainment, to name a few — now virtually require a period of underpaying internship work, effectively barring young people from less privileged backgrounds.
As a result, underpaying youth internships have increased in recent years, and it is not surprising that current discussions by civil society organisations on budget expectations revolve around concerns that the youth subsidy will contribute to the practice of employers that are increasingly using internships to violate wage and hour laws by using young people as cheap labour as opposed to providing them with training. While young people may be willing to accept underpaying internships or volunteer work in exchange for a promise of the on-the-job experience and a potential connection to a future job, it is critical that employers follow applicable laws that closely regulate the circumstances under which this tax incentive will be used.
We cannot overlook that this week, thousands of young people will work 40 hours (or more) answering phones, making coffee or doing data entry — without earning decent income. These low-paid interns receive no benefits, no legal protection against harassment or discrimination, and no job security. They generate an enormous amount of value for their employers, and yet they are paid peanuts. That is the definition of exploitation.
Similarly, this week thousands of young people will clean streets, construct pedestrian walks and bridges, remove invasive plants as part of the EPWP. Some will get a stipend on as little as R66 a day, and – according to quarterly reports submitted at NEDLAC – some will get food parcels as compensation! Again, that is exploitation.
Apologists on both sides of the dividing line for this form of exploitative labour practice argue that it offers “valuable experience.” But a large number of prospective jobs offered through this tax incentive law are likely to often involve mindless or menial work with no explicit academic or training component to facilitate entry into the labour market.
For many young people already in this situation, the labour law seems like a joke: it may be not be widely seen as exploitation, but it’s also standard practice for these work opportunities to have no explicit educational component and to offer immediate advantage to an employer at the expense of the employee.
The labour law, which lacks a strong enforcement backing and is too ambiguous on its own to empower young people to defend themselves, could now be completely immobilised by the Employment Tax Incentive law. It is for this reason that minister Gordhan should provide details on how the resource allocations in this budget will provide for sufficient capacity for the labour department inspectors to effectively monitor workplaces and for the CCMA to adjudicate disputes.
Just recently, I saw a posting in one of the upmarket shopping malls for an “ice cream intern.” The ice cream shop wanted someone to scoop ice cream for no living wage. It’s true that an opportunity to get valuable experience is an essential résumé line. But that’s the case only because the alternative is an empty résumé line. You know what else would look good on that résumé? A festive season job scooping ice cream. But employers would have to be foolish to pay a decent wage to applicants whose services they could get for a fraction of the price.
Similarly, instead of spending allocations from previous budgets creating decent jobs to maintain infrastructure and other core municipal services, municipalities and other government departments are “abusing” young people by giving them stipends through EPWP to do what is supposed to be a living wage full-time job.
For example, according to one report submitted at NEDLAC, in the Environment and Culture Sector, the Food for Waste Programme came as a result of municipal waste collection backlogs and targets new areas where the services are not provided and municipality has no workers on the ground to perform the waste collection services. All this is done in the name of poverty alleviation and offering “valuable experience” to young people.
There is no doubt that great work opportunities still exist — paid positions transparently advertised and filled, stepping stones to full-time jobs, opportunities genuinely focused on education and training. But the rash of illegal, exploitative situations has destroyed any notion that internships, EPWP work opportunities, and even the best of what is likely to come with this Employment Tax Incentive law are inherently “win-win.” The well-intentioned, structured, paid training experience of yesteryear is increasingly giving way to an underpaid labour racket that harms all of us.
Twenty years into democracy, young people should be focused on preparing for their careers, not worrying about whether their employer is exploiting them. Ultimately, the government has a fundamental responsibility for ensuring that the labour market remains a level playing field and that South Africa continues to be a land alive with possibilities. The law has said for over a decade that unpaid work, with few exceptions, is illegal. It’s time to enforce the law and not allow back door wholesale exploitation. This protection must be stronger in times of election campaigns and transitions in government.
This is a chance for this budget, the government, and the labour movement to show young people like my friend that it hasn’t outlived its usefulness. As a nation, while supporting efforts to create decent jobs, we should stand against modern day forms of exploitation. Because, not even children in the mines worked for food parcels.
Nkosikhulule Xhawulengweni Nyembezi is an independent policy analyst.
– By Nkosikhulule Xhawulengweni Nyembezi
