Business

Concrete wage gap

Lynley Donnelly

Aside from boosting national pride, hosting the Fifa World Cup will, it is hoped, help develop South Africa's economy.

Aside from boosting national pride, hosting the Fifa World Cup will, it is hoped, help develop South Africa’s economy.

But the wage gap in the construction companies involved in building 2010 stadiums and other infrastructure projects suggest the mega sporting event’s shining legacy will be reserved for the already rich.

This is according to a report on directors’ fees in the construction sector released by the Labour Research Service (LRS) and the Building and Wood Workers International (BWI) Union.

The survey examined six listed companies that have been involved in major projects in the past five years, or which supply and produce construction materials and stand to see profits rise along with demand for their products.

According to the report the average annual salary of a CEO, an executive director and a non-executive director was R6.9-million, R4.3-million and R261 000 respectively.

The average annual minimum wage for ordinary workers was R28 006.

It would take a worker 245 years to earn the equivalent of a CEO, 153 years to earn the same as an executive and nine years to equal the salary of a non-executive director.

“This is a new dimension to one of the most spectacular mega-sporting events in South African history,” says Eddie Cottle, coordinator of the campaign for Decent Work Towards & Beyond 2010 at the LRS, and editor of the report.

“We are not anti-2010 but we are questioning the development results of an event like this.”

Cottle says construction sector employees are among the most vulnerable workers, with about a million individuals and a 10% unionisation rate.

The conditions locally also reflect international remuneration trends for other large international sporting events, particularly since the onset of the global economic crisis. According to further research provided by Cottle, workers in countries such as the Ukraine, the site of the 2012 European Championships, have agreed to half their normal wages. Wages have decreased to 1 000 Hryvnia per month—the equivalent of about 95 euro, or R1 113. Much like local wages here, this is hardly enough to cover a worker’s monthly food bill.

An additional concern, he says, is the use of labour broking at 2010 construction sites—70% to 80% of workers are employed through brokers on Limited Duration Contracts, usually for about three months.

The local and international construction industry was booming until the onset of the global financial crisis, with pre-tax profits in the sector more than R9-billion in 2007, according to the report.

While local growth figures released this week show a 6% decrease in GDP in the first quarter of 2009, construction is one of the few sectors to have shown marginal growth.

Crecentia Mofokeng, BWI representative for Africa and the Middle East, says the research shows that 2010 development is skewed in favour of shareholders and construction employers, who make mega profits, while workers’ conditions remain the same, with the majority of workers in vulnerable employment.

“A key concern for labour in the engineering and building sectors is the fragmentation of collective bargaining arrangements, which has created huge disparities in the working conditions of construction workers across provinces,” says Mofokeng.

She points out that at Green Point Stadium, which falls under the building industry, a general worker earns a minimum of R17.65 per hour, but at Soccer City, which falls under civil engineering, a general worker earns a minimum of R14.00 per hour.

But construction industry representatives maintain that the sector is doing what it can to ensure workers earn decent wages.

Junaid Allie, executive director of human resources at GroupFive explains that the South African Federation of Civil Engineering Contractors (Safcec) represents Group Five during wage negotiations.

Over and above a multi-year agreement to an 8% increase, finalised in September last year, an additional 3% increase was given to all employees of Safcec member companies, says Allie, adding that additional negotiations are due to begin shortly.

Allie could not give an indication of the proportion of workers employed through labour brokers versus directly by the company; he says, however, that the figure of 70% to 80% “seems very high”.

The reliance on labour broking is due to the nature of the construction industry, which is “transient, cyclical, project based and geographically specific”. In addition, construction projects usually require certain skills sets at different stages of the project, meaning employment cannot always be permanent.

“We are, however, increasingly seeing site based or project based wage agreements, which we adhere to, whether staff are employed through labour brokers or by the company,” says Allie.

The working conditions of labourers are ultimately the responsibility of the cities or provinces where the stadiums are being built as well as the contractors on site, says Rich Mkhondo, chief communications officer of the local organising committee. The LOC is “confident that its partners, including the labour department, will ensure that workers earn a living wage”.

But, he says, the positive impact of 2010 cannot be ignored. Aside from the tangible economic benefits of improved airports, stadiums and roads, more than 145 000 jobs have been created through 2010.

“Those workers may not remain in jobs after the event, but the skills they have acquired will remain,” he says.

Topics In This Section

Comments

blog comments powered by Disqus