Effects of Alternative Trade Union Policy Submissions Essay

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South Africa is an emerging economy in the global market and like most third world countries it faces economic issues that entail unemployment, inflation and economic inequality that has been exacerbated by the apartheid regime. Using fiscal policy, government through the years has tried to address these key issues that affect the economy and the people of South Africa. Progress has been made but various trade unions have actively come against government policy more often than not demanding a more radical stance towards the policies of the government. Trade unions like COSATU and NAMSU play a major role within the South African economic and political sphere. Acting as advocates for their members, they negotiate on their behalf in order to…show more content…
It is the purpose of government fiscal policy to ensure economic growth and economic inclusion. South Africa faces many economic challenges which include poverty, unemployment, education, industrialization and economic inequality. Government through fiscal policy presented in this year’s budget aims to tackle these problems. These policies have been based on the National Development Program (NDP) and they according to government strive to ensure economic growth and inclusion. Of major focus in the recently presented budget was the youth wage subsidy which essentially is a rebate given to employers on employees wages when they employ younger people. According to the government estimates the programme would subsidise 423 000 workers. In effect by 2015,133 000 jobs would have been created as a direct result of the subsidy. 245 000 jobs would have been created regardless of the subsidy and 45000 are expected to drop out of the labour market after the subsidy. The estimated cost of the subsidy is expected to be R5 billion in total for its running duration till 2015.( http://www.anc.org.za/docs/discus/2013/youthsubsidyq.pdf) The government argues that because of market rigidities in the labor market, the minimum wage in South Africa is quite high creating a gap between productivity and the real wages of the inexperienced youth. This makes it costly for employers to employ inexperienced individuals whose adeptness at working is untested. The

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