Opinionista Sipho Hlongwane 4 February 2013

Hypocrisy 101: Lessons in labour from the government sector

The government has had a lot to say about how much the private sector ought to be paying employees in the wake of the labour crisis that started in the platinum mining sector and Western Cape wine farms. Yet reports say that in the expanded public works programme, it isn’t paying much better than private companies. This hasn’t discouraged various ministers, and even the president, from loudly telling everyone else how much to pay their workers.

The government has been either proclaiming, or attempting to proclaim, to certain industries what they ought to be paying workers, thanks to the recent spate of illegal strikes that have swept across the country. In Marikana, it condemned Lonmin for failing to accede to the demands of the workers who went on strike there in August 2012. In the Western Cape, it held meetings to break the labour impasse as striking workers used violence to make their point heard.

The industries that have been immediately hit by the strikes have been those that rely on large numbers of uneducated and unskilled staff to operate: mining and agriculture.

Yet according to a recent Beeld report, in the one area that government specifically targets the uneducated and unskilled, it is failing badly. The extended public works programme, which was tailored to hire those who couldn’t find work anywhere else, pays some people about R30 per day. The recommended wage is R66.34 per day.

“According to the report official statistics show that some provincial education and public works departments in the programme paid workers an average of R30 per day in the last three months of 2012,” said TimesLive.

“However, workers in the agricultural sector in the Free State who were also part of the programme got R50 a day while workers in the same sector in Limpopo got R87 per day.”

The spokesperson for the programme, Kgomotso Mathuloe, told the paper that the R66.34 figure was what was expected as a minimum wage across departments and provinces that implemented the programme.

“The wages differ from province to province. The wage levels are influenced by socio-economic circumstances in various areas,” she said.

It is now a matter of fact that South Africa is experiencing a labour crisis. Though it ‘started’ in the platinum mining belt around Rustenburg in the North West, and then spread to other mining sectors and then the wine farms of the Western Cape, the conditions for it already existed. The tinder was always dry and ready.

Under pressure from a global economy that briefly shrank in growth and now grows at a glacial pace, South Africa is finding it increasingly difficult to deal with both this development and the fact that large parts of the economy were suffering under huge, unmanaged structural unemployment to begin with. Add to that an increasingly volatile workforce and some over-eager police, and you have Marikana, and De Doorns (the lesser extent).

Simply put, employers have had to deal with decreased demand for their goods and services, and have been unable to shift those losses by cutting down on the worker payroll as rapidly as they would like to. Because of the lack of skills and education, workers have not been able to ease pressure by finding work elsewhere. They are stuck in the mines, farms and factories.

At the same time, because of the enormous power that organised labour has in South Africa, the rate of wage increase often outstrips that of productive output. So not only is the cheapest labour getting more expensive, it is doing so at an unsustainable rate.

Many companies respond to this gauntlet of economic problems by finding ways to grow that do not require extra labour, or they find ways to shrink the workforce in order to pay the remainder the new rates. It is by no means a healthy system for anyone involved.

The government is imposing standards on the private sector that it does not meet, in the one programme designed (by the same government) to solve the problem of South Africa’s structural unemployment.

After meetings held with affected parties, the labour department assigned the Employment Conditions Commission the job of reviewing the sectoral determination following the Western Cape farmworkers strike for a minimum daily wage of R150.

Mining minister Susan Shabangu has had a lot to say about mining wages. She joined the National Union of Mineworkers (NUM) in blaming Impala Platinum (Implats) for the mining labour crisis because it decided to grant some of its workers pay hikes, yet at the same time displayed a startling ignorance of basic economics when she threw a royal fit at the news that Anglo American Platinum (Amplats) was seriously considering the retrenchment of some 14,000 people in the wake of decreased demand for platinum and the illegal strikes at the mines.

President Jacob Zuma posited the labour crisis as being the cause of recalcitrant companies last year.

What Zuma, Shabangu and other senior government have said about the labour situation has not been necessarily untrue. Some of it is very salient – for example, the mining sector is only shooting itself in the foot if it adopts a ‘barest minimum’ attitude when it comes to health and safety regulations, as well as the socio-economic considerations in the Mining Charter.

Yet government’s sharp words about how much everyone else should be paying their workers ring hollow and untrue if it does the very thing it condemns elsewhere. Why should anyone take any minister seriously if they complain that the farms or mines are paying ‘slave wages’?

In fact, why is the government not using the expanded public works programme to conduct research into the effects of unfettered wage raises coupled with an inflexible labour market and tell us where that eventually lands them?

At the very least, this is an important warning about employing populist rhetoric to find a way around something as enormous and dangerous as South Africa’s unemployment conundrum. It looks ridiculous if the government’s own boffins think that ‘socio-economic factors’ mean that some jobs should pay R30 per day, and yet try to force the private sector to ignore that very logic. If Marikana taught us anything, it is that violence tends to get people nowhere in the long run. The same is true for incendiary language and hot heads in politics.

Solving South Africa’s ultimate labour crisis – knowing what to do with the millions of poorly-educated adults who can’t find jobs – is no work for fools. It’s really hard, and there simply has to be room for give-and-take. The government knows this. This is why we have sectoral determination, which means that each industry can set its own minimum wages. This is also why the barest minimum wage does not translate to R25,000 per month for everyone. A country like South Africa needs government to understand where to stop, and it needs the private sector to realise that it has a massive role to play in maintaining social cohesion (by not screwing everyone over). Rank hypocrisy helps no one, and especially not when it comes from the lot who write the rules. DM

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"Man is by nature a political animal" ~ Aristotle