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24 April 2017 15:19 (South Africa)
Opinionista Ivo Vegter

Casual labour is only bad for Vavi's unions

  • Ivo Vegter
    Ivo Vegter

    Ivo Vegter is a columnist and the author of Extreme Environment, a book on environmental exaggeration and how it harms emerging economies. He writes on this and many other matters, from the perspective of individual liberty and free markets. He is seldom wrong.

Before giving up Twitter as a noisy place full of annoying real people with opinions and stuff, Zwelinzima Vavi had a few things to say about casual labour. Curiously for a left-wing unionist, he is a darling of the liberal middle-class, but he is still wrong.

It is part of any elementary economics course. Adam Smith recognised the phenomenon in his magnum opus, An Inquiry into the Nature and Causes of the Wealth of Nations, in 1776: “...the greatest improvements in the productive powers of labour, and the greatest part of the skill, dexterity, and judgement with which it is anywhere directed, or applied, seem to have been the effects of the division of labour.”

The concept refers to the productivity improvements that can be had from specialisation: breaking down complex production processes into many smaller problems to be solved by people dedicated to that task. Not only does a farmer farm, a hunter hunt, a baker bake, a fisherman fish, and a butcher butch (yes, etymology geeks, I’ll wait), but a farmer doesn’t have to make her own tools or can her own produce. She is better off purchasing tools from a toolmaker who sells to many farmers, and selling fresh produce to a cannery which buys from all over the region.

Smith considered the division of labour to be akin to a natural law, a consequence of the propensity of humans to trade and barter, which he held to be instinctive behaviour as fundamental as putting your own interests and those of people close to you first.

By 1893, Emile Durkheim declared the division of labour to be “the supreme law of human societies and the condition of their progress”, and considered it merely a particular application of a much broader principle which applied to nature itself. He cited evolutionary specialisation as an example of its application in biology.

Henry Ford is often credited with applying the principle to automobile manufacturing. In his factories, different specialists made different vehicle parts, forming an assembly line of fast, efficient, low-cost production. The economic implications of Ford’s formalisation of the division of labour were immense. Wages doubled, working hours decreased, jobs were created that almost anyone could do, products became affordable to large numbers of people, and market supply rose steeply.

The considerable and relentless rise in prosperity of a majority of the world’s population can be directly attributed to the division of labour.

It is in this light that one needs to read Cosatu general secretary Zwelinzima Vavi’s recent comments about what he calls the “casualisation” of labour. Let me quote his comments verbatim:

“Checkers employs about 73,000 only 35% are permanent earning minimum of R4,000 - 60% supplied by Labour brokers earning a minmum of R1,800.”

“Pick n Pay employs 36,538, only 16,000 are full time earning a minimum of R4,500. The rest are part time earning minimum of R2,000.”

“At Woolworths it's estimated that the ratio is 70% casuals & 30% permanent. Just imagine hotels, restuarents & smaller shops!”

Frankly, I’m sceptical of these figures. Only four categories of retail workers – manager, assistant managers, trainee managers and supervisors – work at a minimum wage over R4,000. In rural areas, only managers and assistant managers do. The lowest minimum wage in the retail sector is R2,006.40 for a general assistant in the sticks. In cities and towns, the absolute minimum is R2,298.87, and all other categories of workers earn more. Moreover, weekly and hourly minimum wages are no different from monthly wages for the same number of hours worked. So if it is true that casuals earn less, they do so for fewer hours worked. If they do that, they have more hours available for leisure, keeping house, raising children or to hold other part-time jobs that make up the difference.

But quibbles about the numbers aside, what Vavi is describing is a real enough phenomenon. The government also recognises it. Department of labour director-general Nkosinathi Nhleko describes “the changing nature of work in which employers were switching from full-time employment to what is known as atypical employment in the form of casual labour, temporary and seasonal employment.”

What they are seeing is merely the division of labour becoming ever deeper, and ever more efficient.

We not only specialise, but workers of all varieties are increasingly contracting their specialised skills to multiple clients. Not everyone needs a full-time marketing research department. But they do need marketing research, so specialists supply it. Not everyone is good at managing the facilities of a large office building, but everyone needs facilities management. Not everyone needs a full-time cleaner on their staff, but everyone needs their houses and offices cleaned on occasion. Not everyone needs a constant fleet of programmers in-house, but many companies need programmers on a project basis.

As a writer, I’ve spent most of my life working as a freelancer, with all the risks and benefits that this entails. It is more efficient for my clients, and I prefer the freedom of specialisation and the ability to work only as much as I need to put food on the table. It certainly brings with it grave personal risks and disadvantages – ask any contract worker about the feast-or-famine threat – but on the whole, paying me only for work actually needed and performed benefits my clients, and ultimately, their customers.

Division of labour makes production more efficient. It is true that an engineer or lawyer can do their own damn dishes. But their specialist knowledge is much better employed by society doing what they’re best at. Conversely, their time is much more efficiently used earning an engineer’s wage, or a lawyer’s fee, from multiple clients who need them, rather than wasting it on a full-time staff position or on manual labour that, in Ford’s words, can be done by almost anyone.

“Casualisation growing so fast that today 30% of all workers are employed in this way,” complains Vavi. “Those [the DA] marching to Cosatu want even higher figures.”

Let’s leave aside that the Democratic Alliance was in fact marching on Cosatu over its opposition to the government’s proposed youth wage subsidy – opposition which Helen Zille has said “keeps people unemployed” – and not because of labour brokers or their implications. If the DA really does want higher levels of “casualisation” (which I doubt), they’d be able to make a good case. Not only because, as Vavi sneered in an interview with The Star: “Our message to the cowards and opportunists in the DA is to come march to us and tell us that half a loaf is better than no bread at all.”

It is trivially true that half a loaf is better than no bread at all. The cutting edge of that argument, however, is that half a loaf, as opposed to a full loaf, is the true consequence of casualisation and is by definition worse. And that hints at a better argument for those who, like me, are not alarmed by the rise in contract or casual work: more efficient division of labour enriches the entire economy. Division of labour has been responsible for the rise of the middle class, for raising worker incomes and reducing their working hours, for making expensive products affordable to the majority of the people, and for increasing the economy’s productivity to such an extent that despite the recent crisis, the UN’s “Millennium Development Goal” of halving poverty by 2015 has already been achieved.

So if casualisation isn’t bad for the economy, or even for casual workers themselves, what is the real problem for Vavi and his union cohorts?

Workers who contract with multiple employers for their time, whether directly or through brokers, are not likely to be union members. And despite the terrible laws in South Africa that permit “closed shops” (in which unions can force workers who don’t want to join to do so), or “agency shops” (in which unions can legally levy fees from non-members), the idea of non-unionised workers who take responsibility for their own welfare is an existential threat to unions’ power base.

For Vavi to claim that casualisation or labour brokers are a threat to worker welfare is disingenuous. More importantly, it ignores the great economic benefits – from Ford to modern outsourcing – that the division of labour has produced in modern society. To crib a phrase from William F Buckley, a 20th-century conservative editor and icon, Vavi “stands athwart history, yelling Stop.” DM

  • Ivo Vegter
    Ivo Vegter

    Ivo Vegter is a columnist and the author of Extreme Environment, a book on environmental exaggeration and how it harms emerging economies. He writes on this and many other matters, from the perspective of individual liberty and free markets. He is seldom wrong.

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