Johannesburg — A LOWER minimum wage for youth entering the workforce should be looked into to help cut unemployment, a World Bank economist said yesterday.

Emmanuel Jimenez, who led the team that wrote the Bank's World Development Report 2007, Development and the Next Generation, said: "You can't have one minimum wage when you have very different skill sets."

Jimenez was speaking at the local release of this year's World Development Report at the South African Institute of International Affairs in Johannesburg yesterday.

The annual World Development Report is a major statement by the bank on a key area of global development policy. This year it focuses on youth development.

Two years ago, Deputy Finance Minister Jabu Moleketi's proposal for lower minimum wages for youth and for different minimum wages for provinces of the country that suffered from higher unemployment was turned down by the African National Congress's national general council, the party's policy-making body between conferences. The South African Communist Party as well as labour federation Congress of South African Trade Unions strongly oppose any changes to labour legislation along these lines.

Jimenez said two-tier minimum wages had shown promising results in a number of countries. He said that broad labour market deregulation had shown particularly encouraging results in lowering youth unemployment in Spain.

Spain had faced heavy youth unemployment, similar to that in France, and had initially tried unsuccessfully to deal with the problem by making it easier to fire youngsters. Jimenez said that high severance payments also posed a problem as they tended to put firms off hiring young people who lacked experience. Jiminez said many successful youth development policies were based on incentives to remain at school longer, not fall pregnant and ensure infants were immunised. He said it was important to ensure the youth had correct information to make decisions.

A survey in the Dominican Republic showed teenagers knew precisely what they would earn by staying in school one more year, but they vastly underestimated what they would earn by staying at school for four more years.