South Africa

Employment: Western Cape model provides glimmer of hope

By Osiame Molefe 23 May 2012

Youth employment in South Africa is a powder keg, and the sense of amonie felt by youths as a result of joblessness could prove the spark that sets it off. While key decision-makers recognise the problem, much of the wrangling has been over what to do about it. A programme run by the Western Cape economic development and tourism department appears to provide a sound example.

Winchester Mansions is a luxury hotel overlooking Cape Town’s picturesque Sea Point promenade, where the Atlantic seaboard’s well-to-do run daily and walk their pampered Pomeranians. Many kilometres, much wealth and a mountain separate the hotel, with its stark white walls and Cape Dutch-influenced architecture, from the township of Phillippi, where the hotel’s houseman, Xhobani Balasana, lives.

Twenty-four-year-old Balasana is one of seven young people the hotel currently has under its wing through a partnership with the Western Cape economic development and tourism ministry. As a houseman, Balasana is responsible for the general upkeep and cleanliness of the hotel grounds and for maintenance.

The Work and Skills for 100,000 programme, the province’s flagship youth employment initiative, matches suitable 18 to 35-year-olds with prospective employers, who then take them on for six months. The ministry provides participants in the programme with a stipend of R1,200, which the employers are encouraged to top up.

“This programme calls primarily for a partnership between government and business,” economic development and tourism MEC Alan Winde said at an event where Balasana and three of his fellow participants employed by Winchester Mansions were presented to members of the media.

Winde said in exchange for receiving the vetting services they normally would have had to do for themselves and for the chance to hire inexperienced workers at a lower cost, partner companies commit themselves to training the pupils they take on. In terms of the memorandum of understanding which each company signs, participants not retained should leave with skills that make them employable elsewhere.

According to Winde, approximately 70% of the over 2,300 people that have been through the programme since inception have been retained by their respective partner companies. Balasana is among those retained.

He told the Daily Maverick that he came to Cape Town in 2009 after he finished school in the Eastern Cape. He chose Cape Town because he felt he would have better economic prospects in the metro.

He is not the only one to have made such a trek. A study commissioned by the department of social development during the 10-year review of its population policy identified that the Eastern Cape and Limpopo have since 1994 experienced negative net migration.

“Metropolitan areas continue to grow faster than the South African population as a whole. These areas draw the most migrants, followed by secondary towns, while rural areas experience a net loss of migrants. Strong migration streams continue into the Gauteng and Western Cape provinces,” the study said.

Balasana said when he first arrived, he worked briefly in construction in the build-up to the 2010 World Cup.

“I then applied to Workforce who placed me at Winchester for six months. After that, Winchester hired me with a one-month probation, and after probation, I was permanent,” he said.

According to Winchester Mansions’ human resources manager, Wendy Isaacs, employment solutions firm the Workforce Group assists with the recruitment and selection process for the Work and Skills for 100,000 programme. The company also administers payments and provides life orientation and other training to assist the candidates once in the workplace on behalf of the department.

Isaacs said Winchester Mansions would continue to recruit young workers as long as the programme was in place. She said there had been no displacement of existing workers. Of the hotels’ current seven candidates, six have been hired on a permanent basis, Isaacs said.

The department was unable to say whether the programme had experienced “deadweight losses”, which, according to national treasury, occurs when companies use the intervention to fill positions they would have anyway, resulting in a zero net effect on job creation.

But according to Rahim Loghdey, the department’s manager of workforce development, the programme’s most important intervention was its skills development aspect before placing candidates with the partner or another suitable organisation.

Also present at the Winchester Mansions event was Democratic Alliance leader and Western Cape premier Helen Zille, and the party’s parliamentary leader, Lindiwe Mazibuko. The pair have recently taken on the plight of unemployed youths and claim that the youth wage subsidy proposed by national treasury would help many others like Balasana find jobs. Cosatu, they say, has blocked attempts to have treasury’s proposal discussed at the National Economic Development Labour Council – a claim Cosatu strongly denies.

In a recent television appearance, Mazibuko said Nedlac is an organisation where government, business and labour meet. As such, the unemployed are not represented. Mazibuko said Zille would make an appearance at Nedlac to speak for the many millions of unemployed.

Cosatu Western Cape provincial secretary Tony Ehrenreich on Monday called Mazibuko and Zille’s visit to Winchester Mansions a “gimmick to make political mileage” because the Work and Skills for 100,000 programme is not the youth wage subsidy proposed by treasury.

Ehrenreich is right. Winde said the programme was not a subsidy to businesses, but a stipend paid to candidates working in partner organisations.

In effect, they both reduce the cost to the employer, but the differing mechanisms mean that some of the unintended consequences Cosatu is concerned about are mitigated in the Work and Skills partnership model. The Western Cape model also differs in that it targets mostly partners in the small and medium enterprises sector, which has been noticeably absent from the country’s jobs growth.

Ehrenreich added that the DA knows discussions have been continuing at Nedlac to ensure that the unintended consequences of substitutions or job displacement that may result from a youth wage subsidy are avoided. He accused Mazibuko of twisting the facts as she did with her claim that President Jacob Zuma said Cosatu was blocking Nedlac’s discussion of the youth wage subsidy.

“This just shows that the DA is not letting facts stand in the way of their desperate attempt to try and expand their electoral base, by appearing to be concerned about the huge sea of black youth unemployed,” Ehrenreich said.

But this political tit-for-tat has not advanced the discussions any further and has elevated the youth wage subsidy to a level of importance that it perhaps should not have had in the greater discussion about the solutions to youth unemployment in South Africa. Treasury’s document emphasised that it was but one measure that would give 178,000 young people a foot in the door.

In the Western Cape, for example, alongside the programme, the economic development department runs a “red tape to red carpet” call centre, which helps small businesses navigate the regulatory burdens that are often an impediment to starting business. Another programme, the Cape Activa, is a recently city-run online portal that provides tools, resources and information to the city’s entrepreneurship.

For Balasana, the political tug-of-war is irrelevant. He said he was just glad for the sake of his young child and family back in the Eastern Cape that he has a permanent job. He said he’s learning quickly about the hospitality industry and hopes to work his way up someday to manager. DM

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Photo: Xhobani Balasana talks to Winde, Mazibuko and Zille. DAILY MAVERICK/Osiame Molefe.


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