Employment is stable after the minimum wage increase, but the figures are deceptive.
Last week, media outlets reported on new data showing that expectations of massive agricultural job losses following the implementation of a R105 daily minimum wage were unfounded.
The labour department announced the 52% increase in the minimum wage, effective from March 1 2013, following massive unrest that swept the Western Cape agricultural sector late last year and early this year.
According to Statistics South Africa’s latest quarterly labour force survey, agricultural employment declined by 26 000 jobs between the first and second quarters of this year.
That amounts to a 3.5% contraction, which seems mild compared with the alarming predictions. These included a study by the Bureau for Food and Agricultural Policy, which argued that most farmers would not be able to afford the increase.
However, quarter-on-quarter changes are misleading in an industry that is subject to major seasonal fluctuations. The number of agriculture jobs ebbs and flows with the cycle of the harvest.
Second quarters typically see a large decline from the first quarter — in 2012, agricultural employment shrank by 18 000 jobs during that period, or 2.7%.
Employment up year on year
To obtain a more accurate picture of trends in agricultural employment, we need to look at year-on-year changes — the number of jobs at a certain point compared with the same time the previous year.
Agricultural jobs actually grew by 74 000 between the second quarters of 2012 and 2013, making it the second-fastest-growing sector in the economy after utilities.
A study by economists at the University of Cape Town’s development policy research unit found that the implementation of a minimum wage for agriculture in 2003 had a negative effect on employment.
However, subsequent work by the same unit argued that minimum wages did not lead to job losses in other sectors. The latest labour force survey figures could prove that the situation in agriculture has changed — and that the new minimum wage will not destroy jobs. There are caveats to consider before endorsing this conclusion, however.
The university study found that, whereas minimum wage legislation had lifted average wages, up to 60% of workers still earned below the legal requirement in 2007.
After the most recent minimum wage hike, trade unionists are reporting that many farmers have been attempting to avoid or pass on the increases.
Farmers avoid increases
Some workers were reportedly coerced into signing agreements stating that they will accept less than the new minimum wage — typically R85 a day — in return for keeping their jobs.
Other farmers have simply passed on the increases through higher rent, electricity and food charges for on-farm workers. Farmers who applied for exemptions may have avoided paying the higher wage in the interim.
Therefore, before contending that minimum wages have not had the predicted effect on employment, we would need to know what has actually happened to farmworker wages.
Much of rural South Africa remains the domain of baasskap (the “boss” mentality), where modern labour standards and regulations hold little purchase and legislated increases carry no guarantee of actually affecting wage levels.
The dismal state of the labour department and the woefully inadequate number of inspectors suggests that workers will have to organise themselves to secure gains that push employers below expected profit margins or challenge entrenched social relations.
A late recovery
The quarterly labour force survey was conducted from April to June, and many layoffs may have occurred after this point because farmers are locked into production cycles that require a certain labour cohort.
In any case, it is too soon to be able to glean the full employment effects of wage increases. Job losses from farms that intend to respond to higher labour costs by downsizing or mechanising may only be seen later.
The survey figures should also be seen against the trend of a longer-term uptick in agricultural employment. However, recent gains are due more to a late recovery than to any propitious expansion.
Agriculture was badly affected by the 2008 economic crisis and between 2010 and 2011 the sector was still haemorrhaging jobs. The subsequent recovery was strong — restoring 114 000 jobs — but agricultural employment is still 80 000 below pre-crisis levels.
Many of the experts who argued that wage increases were unaffordable worked against the assumption of a given profit rate or used models that did not accurately reflect the conditions on most farms.
The obstinacy of farmers in the face of worker demands may reflect a desire to cling to old ways of life and paternal systems of authority rather than point to any hard and fast “economic realities”.
It would seem that there was indeed scope to increase wages above the unconscionable R69 per day without incurring massive job destruction or restructuring.
Challenges remain for workers
But the travails of South Africa’s agricultural sector are far from over. The same Bureau for Food and Agricultural Policy report that warned about unaffordable wage increases also found that even a wage of R150 a day would be insufficient to meet the nutritional needs of a family of four with two earners.
The latest job figures, despite being more sanguine than many predicted, may conceal ongoing labour restructuring that is disempowering workers and spreading insecurity. Recent years have seen farmers make advances on long-held aims of converting their workforce into a small core of better-paid on-farm workers supplemented by seasonal workers drawn from rural communities.
Labour broking on farms has exploded and is associated with the same conditions as in other sectors: workers are often paid below the minimum wage, receive fewer benefits and are unsure about who employs them.
Previously, farmers were flexible in their use of brokers owing to weak labour regulation and worker organisation. This may be changing after the show of worker power earlier this year. Unionists say that strike leaders have been targeted with retrenchments.
Those lucky enough to find new employment often work for brokers on condition that they abstain from “politics”.
Unions emboldened by the rise of worker militancy are now facing an entrenched battle to replace systems of paternalism with modern labour relations. There are reports that farmers are obstructing bargaining processes by failing to open their books or provide even basic information to unions, thus failing to substantiate their claims that increases are unaffordable.
Radical changes needed
The National Development Plan (NDP) aims to create a million jobs in agriculture by 2030. Current trends, with employment levels lower than five years ago, place those hopes on a poor footing.
But it is the planners’ failure to deal with the role of liberalisation and deregulation in laying the basis for the current crisis that makes the NDP’s goals for agriculture wishful thinking.
Providing decent livelihoods for rural South Africans requires a radical programme of agrarian reform. The organic, bottom-up efforts of farmworkers in the Western Cape to organise for decent work could strengthen the social agencies needed to deliver that programme.
Niall Reddy is a researcher at the Alternative Information and Development Centre