trade unions

The most important, single issue facing government today is improving conditions for greater labour absorption.

The South African Bill of Rights says, “Every citizen has the right to choose their trade, occupation or profession freely.” But local laws and institutions do not fully support that right, and one consequence is our staggering unemployment rate.

The results of the Quarterly Labour Force Survey (QLFS), recently published by Statistics South Africa, revealed some alarming labour market trends. According to the strict definition, the unemployment rate increased from 24.3 percent (4.165 million) in the last quarter of 2009 to 25.2 percent (4.310 million) in the first three months of 2010 – a loss of 145 000 jobs. When the first quarter of 2010 is compared to that of 2009, if we include discouraged work seekers who have given up searching for work because they believe there is none available, the unemployment rate increases from 28.4 percent (5.4 million) to 32.4 percent (6.1 million) unemployed people.

This paints a very bleak picture indeed.

To make matters worse, these employment figures are at odds with the growth in real gross domestic product (GDP) – 4.6 percent in the first quarter of 2010 compared to 1.6 per cent in the first quarter of 2009. And, according to the Quarterly Employment Survey (QES), gross labour earnings paid to employees in the formal non-agricultural sector in the first quarter of 2010, was 11.7 percent more than in the first quarter of 2009. Therefore, on average, for those with jobs in South Africa, things got a whole lot better despite almost a million losing theirs in 2009.

A further worrying concern is that, of the unemployed, 63.5 percent have been out of a job for longer than a year, and the majority are young with limited education and other skills. If the low end of the labour market were allowed to function unhindered, young and unskilled people would not have such a desperate struggle to get onto the first rung of the employment ladder. Without doubt, the already employed will protest that any weakening of job-security legislation or erosion of minimum wages will lead to increased poverty. Studies have shown that unemployment is a significant driver of poverty, so how can we close our eyes to it.

Often ignored is that worker productivity is the main determinant of what employers are willing to pay, and a legislated increase in the price of labour does not increase worker productivity. According to fundamental economic logic, if a minimum wage of R2 000 per month can improve conditions for workers, then one of R20 000 per month should improve conditions even more. But, obviously, a minimum of R20 000 would render more people unemployable. People who do not get jobs as a result of such legislation are unseen victims while those who can clearly be seen to lose jobs are only too visible.

Claire Bisseker states in an article (Financial Mail, 25 June 2010) that, “There are 387 manufacturers that have refused despite an exhaustive legal process by the clothing industry national bargaining council, to honour minimum wages and conditions of employment.” She reveals that a total of 43 percent of clothing manufacturers in the country are not complying with minimum wage legislation. The clothing industry national bargaining council is currently sitting on execution orders against the first 70 firms that have failed to meet their regulatory obligations, which, if carried out, could result in about 4 000 workers losing their jobs. I know that if I were one of these 4 000 individuals facing unemployment, I would certainly be against the carrying out of the execution orders.

Bisseker sums up the situation succinctly, “The standoff in the clothing industry forces a choice to be made between upholding decent working standards and making thousands of people redundant in the middle of winter”. So, at the heart of the matter is the African National Congress’ policy of ‘the creation of decent work’. The small firms that ‘refuse to honour minimum wages and conditions of employment’ do not do so out of pure cussedness or because they are mean but because they cannot afford to pay the higher costs. But, who gets to decide what is ‘decent work’? Despite all statistics, if you were the one unemployed, so that, as far as you are concerned, the rate of unemployment is 100 percent, surely you would want to have the right to decide for yourself what constitutes ‘decent work’.

Employees do not happily work under trying conditions for extremely low wages because they prefer such jobs to better paying and more attractive ones. They take such jobs because, at the time, it is their only chance to earn the money they need to support their families. Their choice is often between a poorly paid, unpleasant job, and starvation for their families and themselves.

A significant and laudable factor that emerges from Bissiker’s article is that it was the South Africa Clothing and Allied Workers’ Union (SACTWU) that asked for the writs of execution to be delayed to “explore further avenues”. The spokesperson for the Apparel Manufacturers of South Africa (AMSA) was more uncompromising. According to Ms Bissiker he said that, “they don’t want to shut companies down either but neither can the status quo be allowed to continue, simply to save jobs”.  Do AMSA and SACTWU truly believe that the workers will be better off unemployed than in jobs that, in their view, are not “decent”? Will they support the families of the unemployed workers who lose their jobs because of these actions? Self-interest is usually buried in such strange logic.

Other manufacturers will benefit if the 387 firms can be knocked out of the competition, but the self-interest of the labour union seems more obscure. Is it in the interests of SACTWU members for their union to be a party to making first 4,000 and later even more workers unemployed? Labour unions are supposed to look after the interests of their members, a task they perform with vigour. It is not their responsibility to solve the country’s socio-economic problems. That is the task of government.

The most important, single issue facing government today is improving conditions for greater labour absorption. For government to achieve its stated objective of reducing unemployment and stimulating growth, it has to urgently address labour market policies and laws that exacerbate unemployment, such as those that abridge the constitutional and human rights of garment manufacturing workers, and threaten to imminently make thousands of them unemployed.

- Jasson Urbach is an economist at the Free Market Foundation. This article first appeared in the Tshikululu Social Investments’ (TSI) Thought Leadership. It is republished here with the permission of TSI.

Now is not the time to cut funding for HIV/AIDS. This is the message from the Treatment Action Campaign (TAC), Médecins sans Frontières (MSF), the Congress of South African Trade Unions (COSATU), and the World Aids Campaign.

These organisations, together with Section27 and the Children's Rights Centre, among others, will be holding a march in Sandton on 17 June to the United States consulate, where they will hand over a memorandum calling on the US to reverse cuts on funding for HIV treatment.

TAC secretary general, Vuyiseka Dubula, explained that while they are celebrating the milestones of one million people in South Africa receiving treatment for HIV/AIDS, and five million people receiving treatment around the world, there are still 10-million in need of treatment. Dubula stated that this is why they are targeting the FIFA World Cup, when the world is focused on South Africa.

To read the article titled, “Warning against cuts in AIDS funding,” click here.

In our response to President Zuma`s State of the Nation Speech last week, SACTWU issued a press release which stated the following:

"The COSATU-affiliated Southern African Clothing and Textile Workers` Union (SACTWU) has noted the President’s statements in his State of the Nation speech that "…industrial policy will build labour absorbing industries…", that the broad policy direction outlined in his address will be practically detailed in implementation strategies to be announced by the responsible Ministries, that Ministers will be required to sign target performance agreements and that 2010 will be a year of action.

We welcome this.

We now look forward to the details and call for increased resources to be allocated for industrial policy implementation measures to build labour absorbing industries, such as clothing and textiles, by the various responsible ministries, in particular by the Minister of Finance in his budget speech next week."

We now notice that, in his Budget Speech of today, the Minister of Finance, Mr Pravin Gordhan, has announced the following:

"An additional R3.6 billion is allocated to the Department of Trade and Industry for industrial policy interventions consistent with government’s new Industrial Policy Action Plan. In particular, these funds go to support investment and production in the automotive components and clothing and textile industries."

We are aware of the national resource constraints and in this context welcome this specific additional allocation. We now look forward to working with the DTI on the details of how this additional allocation is to be spread amongst and spent in the identified sectors as rapidly and as efficiently as possible.

In addition, we look forward to hear what other Ministries have to say about how their specific departments can support labour absorbing industries such as clothing, textiles and leather.

Andre Kriel
General Secretary
SACTWU

NEHAWU welcomes the Budget Speech that was tabled before parliament today by the Minister of Finance, Mr Pravin Gordhan and we are happy with the government’s commitment to increase and shift government spending on key priority areas with the intention to create a new growth path for the local economy.

Whilst there are important commitments in the budget speech which we support such as increased allocations for HIV/AIDS although we are concerned that the spending over the Medium Term Expenditure Framework period remains moderate.

We welcome and support the government’s efforts to fight corruption and trim down the obscene salaries and perks that public servants in governments and parastatals have been awarding to themselves.

This obscene spending and crass materialism is the main reason why we have the highest rate of inequalities in this country and we expect those who hold leadership positions to take the lead.

Despite a clear commitment made in the State of the Nation Address and even in this Budget Speech to the National Health Insurance scheme it is surprising that the minister still seeks to increase monthly monetary caps for deductable medical scheme in order to expand the membership of the current medical schemes.

This is disappointing and confusing because it sends mixed messages and underscores the need to expedite the process towards the introduction of a single national insurance fund. The implementation of the NHI is central to the transformation of the health sector and will be a big step towards the goal of building a comprehensive social security system.

The union is deeply worried at the fervor with which government is pursuing and committing itself to the use of “public-private partnerships” in the health sector which we are totally opposed to.

The minister has failed to give more details as to the nature and extent of the PPPs he is alluding to and he goes on to say that “the flagship PPP hospital project will be Chris Hani Baragwanath, for which feasibility study is now complete”. The union is shocked to hear about this clandestine flagship project as we were never informed about it as stakeholders.

NEHAWU has undertaken a widely supported and credible study on the transformation of the Chris Hani Baragwanath hospital on the basis of which we made some important policy proposals for the transformation of our hospital system. Yet, the project has since been stalled in favour of the introduction of PPPs.

The use of public-private partnerships in the face of despicable profiteering in the private health industry is a deviation to the promises made to the electorate in 2009 and can only give confidence to those who are opposed to the transformation of the health system.

We are extremely disappointed that while the governments theme is about “doing things differently” there were no major fiscal and monetary policy changes in the budget speech and that inflation targeting will be maintained.

Although we welcome a further R1.3 billion to improve the salaries of FET college educators, we call on government to extend this increase to all workers in the sector rather than just educators. NEHAWU calls on government to urgently introduce amendments to the Further Education and Colleges Act with a view to transfer these workers back to the public service.

We call on the minister to refrain from negotiating with organized labour on wage increase through the budget speech and while we accept that the wage bill may have almost doubled in five years, this was from an unacceptably low base, which makes even the current level pay of inadequate.

Job creation and the filling of vacant posts in the public service should not be done at the expense of the creation of decent conditions of employment and as NEHAWU we are calling for a comprehensive review of the remuneration policy and the filling of vacant posts as part of improving government’s capacity to deliver service better.

Fikile Majola
General Secretary
NEHAWU