Nicoli Nattrass and Jeremy Seekings take issue with Eddie Webster=D5s=20 social democracy
SOCIAL democrats must come out of the closet, says sociologist Eddie=20 Webster in a recent article (M&G August 18 to 24). Indeed they should.=20 But Webster=D5s vision of social democracy is an impoverished one. His=20 enthusiasm for the labour movement seems to have blinded him to the=20 needs of the poor and unemployed outside of trade unions =D1 a curious but=
not unusual stance among industrial sociologists in South Africa. Webster writes that =D2social democracy in a South African context refers t=
a commitment to equity-led growth and support for tripartite agreements=20 between labour, management and government=D3. He concentrates on the=20 second of these issues, neglecting the first. We welcome Nedlac (National=
Economic Development and Labour Council) and agree that South African=20 social democrats should support an industrial relations system based on=20 collective bargaining. But social democrats must not lose sight of the=20 urgency of alleviating poverty and reducing inequality in the country as a=
Social democracy is based on the idea of generating growth and social=20 justice through class compromise. In an economy with low unemployment,=20 a class compromise between labour and capital can accomplish both of=20 these aims. In a labour-surplus economy, however, a further social divide=
must be addressed: that between the employed and the unemployed. South=20 Africa faces a trade-off between wage growth, which is clearly in the=20 interests of employed workers, and employment growth, which is in the=20 interests of the unemployed. Social democrats should surely prioritise the needs of the poorest half of=
the population. This entails, first and foremost, a clear commitment to job=
creation through labour-intensive growth. Expanding employment=20 opportunities =D1 even at relatively low wages =D1 is the fastest and most=
sustainable way of alleviating poverty and narrowing social inequality in=
South Africa. The creative challenge facing social democrats is to ensure=
that corporatist arrangements between labour and capital contribute to,=20 rather than undermine, labour-intensive growth and hence social justice for=
all. Webster overlooks this necessity. Webster eulogises South Africa=D5s emerging industrial relations system,=20 without pausing to consider its implications for the poorest half of societ=
The core of the proposed Labour Relations Act comprises a system of=20 Bargaining Councils, which are little changed from the old Industrial=20 Councils. In these councils, organised labour and business bargain=20 minimum wage agreements, which can be extended across the entire=20 industry by the minister of labour through a =D2wage determination=D3. This=
system can be used by big employers and trade unions to drive out low=20 wage competition, especially from small and medium enterprises. Increased international competition will exacerbate the threat to=20 employment posed by industry-wide wage determinations. Some firms will=20 be able to improve productivity and switch into higher value-added product=
lines. Others will be forced to cut costs, including through cutting=20 employment. Some firms will be driven out of business altogether. In this=
gloomy but possible scenario, incomes rise for a shrinking elite of=20 employed workers, while increasing numbers of workers are banished into=20
In the heyday of Swedish social democracy, centrally bargained, industry- wide wages were used as part of a strategy to raise productivity in the=20 economy. Most workers who lost their jobs as a result of lay-offs or=20 bankruptcies were retrained and re-employed in faster growing parts of the=
economy. While unemployed, people were provided with generous welfare=20 benefits. The high wage, high productivity strategy was thus consistent=20 with narrowing inequality =D1 as long as the Swedish economy grew rapidly=
and unemployment remained low. South Africa cannot afford such a strategy. Putting half the working age=20 population on welfare simply is not an option =D1 not unless South Africa=
discovers oil! Webster entertains the quaint idea that the Reconstruction=
and Development Programme is a clear statement of the government=D5s=20 intention to establish =D2an authentic welfare state that extends its prote=
to the majority of the population=D3. Is this a cynical joke? South Africa=
poor may benefit from primary health care and basic education, but their=20 livelihood is going to depend on economic growth and job creation rather=20 than the meagre welfare benefits that any government in South Africa is=20 going to be able to provide in the foreseeable future. Unlike employed workers, the unemployed poor do not have powerful=20 organisations to advance their interests. Social democrats should therefore=
be particularly mindful of strategies that neglect or harm the poor, and be=
on the lookout for opportunities to empower them. This means keeping a critical eye on organised labour, while supporting it=
in most respects; social democrats have a broader and trickier agenda. In a=
labour-surplus economy, trade unions do not play an unambiguously=20 progressive role: while challenging inequality in their struggles with=20 employers, they can all too easily exacerbate inequality by privileging a=
labour elite over the poor and unemployed. Social democrats should celebrate labour=D5s basic gains in collective=20 bargaining. But they must match this with meaningful policies to promote=20 labour-intensive economic growth and improved access of the poor to=20 income-earning opportunities. These range from policies which support,=20 rather than hinder, the small business and informal sector, to protecting=
labour-intensive firms from centrally bargained wage pressure.=20 Defining a special labour-intensive economic sector which cannot be=20 affected by wage determinations in Bargaining Councils is one option.=20 Providing guaranteed exemptions to labour-intensive small businesses is=20 another. Land reform and education and training should be further weapons=
in the social democratic armoury. Social democrats need to formulate and=20 debate innovative ways of ensuring industrial democracy and job creation. Nicoli Nattrass is an economist at the School of Economics, UCT; Jeremy=20 Seekings is a sociologist in the UCT sociology department