Karen Harverson
South Africa does not have the luxury of time to plan for the transformation of its economy. All players at national, sectoral, company and community level need to co-operate in a joint strategy to achieve this second miracle.
“There is no alternative open to South Africa except to seek a meaningful social partnership. It is our view that we have reached a moment wherein the leadership of each constituency is willing to consider the possibility of making short-term trade-offs and of mobilising their collective resources to create a longer-term outcome which will deliver employment, economic growth, and uplift the living standards of all,” said National Economic Development and Labour Council (Nedlac) executive director Jayendra Naidoo, speaking at the 39th annual convention of the Institute of Personnel Management held this week.
Naidoo said a formal discussion on such a contract was under way at Nedlac and initial conclusions would be made in the first quarter of 1996.
The key elements of the contract should include wages and incomes, investment and job creation, reprioritising government expenditure and a strategy for the successful restructuring of South African industry.
While the new labour law will do much to stabilise industrial relations, the growing conflict between workers and employers regarding job security and real wage gains, versus productivity was still unresolved, said Naidoo.
He suggested that a creative approach be adopted whereby wage increases are related to inflation, and inflation control to skills gains, and to establishing a floor of improved social benefits which are provided by the state.
As an example, he said Scandinavian governments have kept prices and inflation under control in exchange for economically and socially-sound wage policies implemented by unions and employers.
“The Australian government and unions likewise linked the social wage, wage restraint and investment policies in relation to each other.” On investment, Naidoo said a strategy for economic growth and investment was needed which delivers significant growth in employment. “Recent figures show the rate of manufacturing sector investment has increased considerably, yet employment gain has been minimal.”
He said one of the areas which could be explored was a policy to promote the employment of additional workers by means of training subsidies, or even wage subsidies for vulnerable categories of
An additional aspect is the extent to which workers share ownership and participation in Boards of companies. “This has both an income dimension as well as providing a valuable incentive to unions and workers to ‘buy into’ a longer term strategy on wages and incomes.”
He urged that government reprioritise its expenditure. “Hard decisions must be taken which will impact on the interests of different groups. There is a potential tension between a strategy of increasing spending on infrastructure and services, and fiscal discipline.” Naidoo said the size of the public sector must be seen in relation to the working conditions, wages and benefits of those working there as well as the quality of the services they provide.
“This implies controversial, but necessary discussions which impact on the employment of civil servants, new employment in specific sectors, and decent remuneration and skilling of public sector workers.” He said a strategy to enable South African companies to become competitive could include measures such as lower raw material pricing, lower cost of services and lower transportation costs.
“Also specific sectoral strategies, although controversial, need to be considered.” He added that within the concept of targeting specific sectors, the favouring of more labour absorbing sectors should be considered relative to capital intensive sectors.
Naidoo concluded that while competitiveness and productivity will require agreements at a national level, it was critical that strategies be developed at sectoral and company level. “Employee and union participation in decision-making can improve economic performance both at firm level and in the economy as a whole and can meaningfully contribute to enhanced productivity, innovation, flexibility and human dignity.”