Job creation should start with young people rather than those with more work experience, the Centre for Development and Enterprise (CDE) said on Wednesday.

This followed four working papers as well as intensive discussions between the CDE, Business Leadership South Africa and stakeholders across the political spectrum on solutions to job creation.

"Young people are - or are believed to be - less productive than more experienced workers.

"Employers are therefore less likely to take a chance on hiring them," said CDE executive director Ann Bernstein.

According to the CDE, 2,7-million people aged between 15- and 30-years-old were unemployed in 2007 while 72% of this group of young people had never worked before.

"Young people who are forced to remain jobless for long periods are deprived of on-the-job learning, leaving them with a skills deficit which many will never be able to remedy," the CDE said.

"If we can't find everyone a job - and the truth is that we can't - we should focus on the young," said Bernstein.

According to the CDE, the best way to tackle unemployment would be to change the factors which were preventing labour markets from functioning efficiently.

"However, given the entrenched opposition to this approach, we have developed - as a second-best approach - some specific ideas for tackling the problem of youth unemployment."

The CDE had developed four proposals.

The first was tax breaks for employers who gave young people opportunities.

"Give a combination of tax breaks and year-long exemptions from laws on hiring and firing to employers hiring first-time employees between the ages of 18 and 24," it suggested.

It added that a wide range of international experience had shown that these policies could be successful in reducing youth unemployment, especially when vocational training was also available, and when both employer bodies and unions were involved in the design and implementation of the programmes.

Secondly, the CDE proposed that Special Economic Zones (SEZs) be created.

"International experience shows that SEZs are particularly effective in creating employment for young people and young women in particular.

"Because unemployment is highest for young people - and highest of all for young women - SEZs are a very attractive option," the CDE said.

Businesses located in these zones should be exempted from costs including company taxes, tariffs, and all but the most basic labour and health and safety laws, it added.

"Government should undertake to provide these zones with effective services and infrastructure, and to monitor how many young people find jobs in each".

Thirdly, the CDE recommended the piloting of a vocational education programme linked to apprenticeships in some of South
Africa's rapidly growing medium-sized towns, such as Nelspruit and Witbank.

"South Africa has the unusual double problem of mass unemployment and a shortage of skilled workers.

"One major reason for this is a mismatch between what the schools are producing and what employers require," the CDE said.

It added that South Africa's education system provided much less vocational education than most other countries.

Fourthly, the CDE suggested the creation of large and very simple employment schemes in the poorest provinces, such as Limpopo and the Eastern Cape.

"These schemes should guarantee dignified and useful employment for every person who applies to them."

The CDE added that wages should be set at a level that would guarantee subsistence; ensure that only the poorest and most in need of a job would apply; and keep the fiscal demands of the scheme to acceptable levels.

"These schemes should be regarded as temporary initiatives while we remove the regulatory barriers and address the educational and infrastructural constraints that make it difficult for private companies to create jobs for everyone who wants to work."

The CDE said that every year, hundreds of thousands of young South Africans entered the labour market.

"If current trends continue, most of them will not find work.

"We believe our proposals for addressing the national unemployment crisis are based on an accurate analysis of South Africa's economic challenges; are affordable and feasible; and could dramatically reduce unemployment," it said.