Mail & Guardian readers share their thoughts on the South African labour market, rhino poaching and more.
Bridging the wage gap
Nic Dawes’s article “The great carve-up” (July 22) made the far-fetched argument that labour must opt for lower salary increases for the sake of the economy — so that it can absorb as many unemployed as possible. Dawes forgets that the structure of our economy produces huge inequalities, with a majority of black people living below the poverty line while the mainly white propertied class continues to live large.
Global capitalism has recently experienced its most acute crisis since the 1929 Great Depression. Our economy, in different industries such as manufacturing, mining and textiles, lost one million jobs. Directors of JSE-listed companies earn up to 300 times what an ordinary worker earns.
The article showed how biased Dawes is towards the capitalist class, which continues to enjoy the lion’s share of our economy at the expense of the masses. Perhaps he could have used his position as Mail & Guardian editor to admonish greedy capitalists, who rake in social surpluses and profits, to meet workers’ demands. Dawes is misleading the people if he says that if labour settles for lower salary hikes it will create a space for new entrants to the labour markets.
Capitalism is by nature a voracious system. What it is interested in is to make a profit. Now we are witnessing a systemic crisis of capitalism in Greece and other European countries such as Italy, Ireland, Spain and Portugal. Capitalism and the free market have failed to address the problems of post-apartheid society. Salary hikes as advocated by progressive unions are a tool to bridge the “apartheid wage gap” that characterises our society.
To fight unemployment, the government must nationalise areas of the economy such as mining, metals and minerals, petrochemicals, machinery and equipment, so that millions of jobs can be created. That process must be led by a “developmental state”, which will intervene on poverty, HIV/Aids, underdevelopment and education.
I advise Dawes to take a tour of the nearest squatter camp to see the conditions in which striking workers live and he will realise they deserve a double-digit salary increase. — Mabake wa-Masweneng, Benoni
The core problem in the South African labour market is that industry is developing very slowly or not at all, and that it is reducing its employment. As a result, the amount of cash to go around is growing only slowly — and because fewer workers are employed, the cash is concentrated in fewer hands. Understandably, the richest people in business are benefiting the most from this and the workers are getting stroppy.
The solution proposed by the business community, through spokespeople such as Dawie Roodt and Anne Bernstein, is “labour market flexibility”, meaning that unions should be weakened so that businesses can fire workers easily or cut their salaries. The result of this would be a sharp reduction in wages. According to the business community, whose word is accepted uncritically by the press, they would use the money released by this reduction to hire more workers.
This seems paradoxical. Making it easier to fire workers would make it easier to hire workers? This suggests that business would prefer to hire workers only when they could easily fire them. Such workers could not be expected to have any allegiances to the business, just as the business management would have no respect for or responsibility to workers. This strikes me as a situation under which a social contract would never develop.
Business says that if workers’ rights were taken away it would hire more people. This might well be true of a Chinese textile business in Newcastle but obviously not of all business. Besides, what if business changes its mind about this? For the past 30 years, business has used the money saved in wage cuts not to hire more workers but to mechanise, improve profits and enhance executive bonuses. The business community is asking us to trust it when past performance suggests that there is no basis for such trust.
If worker salaries fell sharply, workers would be able to afford fewer goods and services. If fewer workers were hired then demand would fall and economic growth would slow down. But the people owning the companies would have more money, so they wouldn’t need economic growth as much as workers would do. It seems clear, therefore, that those calling for “labour market flexibility” are playing Russian roulette with the economy.
Of course, lower salaries could lead to cheaper goods, which could possibly be exported. The problem is that salaries would have to fall a long way before they would be competitive with Asian sweatshop labour. While this was happening, the huge Asian economies could plan to undersell us, so there would be no guarantee that we would find markets. We might instead find ourselves with vast amounts of unexportable goods that the locals could no longer afford to buy, generating a crisis of overproduction and a severe business depression.
One obvious problem with this proposal, incidentally, is that it would offer nothing at all for currently employed workers so it would be impossible to get them to support it. It does seem true that everybody in the system is pursuing immediate private benefit and nobody is thinking about how the system itself could be made to work. Trade unions are hopelessly weak and employer federations are hopelessly greedy. Neither side is paying any real attention to the needs of the country.
What is needed is for the government to step in and control the situation instead of standing on the sidelines pretending to be an honest broker. Only the government has a real interest in increasing employment and fostering economic growth because it has a stake in getting re-elected, and these outcomes would benefit it. Of course, this requires transparency and democracy, and a degree of statesmanship, instead of the present system under which unions try to use their dwindling political clout and employer federations their growing political clout to manipulate the government’s policies in their favour, while politicians queue up at the special-interest-group troughs.
The present system is certainly heading us into trouble. But let’s not forget that the countries that have deregulated their labour markets and crushed their unions, such the United States and the United Kingdom, are not doing at all well economically now. Countries with well-regulated labour and capital markets, on the other hand, are doing better.
We should try to imitate winners, not losers. — Mathew Blatchford, University of Fort Hare
I don’t understand how Nic Dawes could call public servants “insatiable”. The question is: What is there to satisfy us? For the record, the professionals in the public service are very low paid compared with their counterparts in the private sector. The majority of us can’t afford a housing bond or even an RDP house. — Masaka Kgobane
Don’t turn govt into an empty shell
The M&G, on the whole, does a brilliant job of incisive investigative journalism and last week’s edition (July 22) was no exception. On the other hand, you also publish articles that come across as shallow puff pieces, often in the business section. In one on medical aids, you quote the chief executive of Discovery on how wonderful it is that his scheme can afford to cover a hospital bill of R16.5-million. The fact that a hospital bill can be R16.5-million is precisely why private healthcare is a dodgy concept. Where was your analysis?
In another article, you caption a picture: “Mining needs to be a tool for sustainable development—” Mining is about as unsustainable as you can get: dig something out of the ground and it’s gone. The writer, on Zambian copper mines, says: “Encouragingly, Zambia has vowed not to impose windfall taxes or take mines under state control.”
“Encouragingly”? The only way mining can contribute to sustainable development is precisely if the government extracts the maximum return to the public purse and invests the proceeds for the long term.
In a country where nationalising mines is a hot topic, we need to move away from the caricatured positions that Milton Friedman’s economics “ended history” (as Francis Fukuyama would have us believe) and stop painting Julius Malema as a buffoon on the grounds of his argument for nationalisation. A government that lacks the capacity to deliver basic services would be foolhardy to take over the management of an enterprise as complex as a mine, but there are many other mechanisms for extracting a fair share of the proceeds.
There’s the Norwegian model of a sovereign wealth fund based on oil profit. In Australia state governments have traditionally levied royalties on mineral rights. This has recently been replaced by a resources rent tax, in essence a super-tax on mining profit above a threshold.
Finally, has anyone questioned the logic of turning government into an empty shell with no competence, leaving the public purse at the mercy of contractors? In the United States parts of government have become so devoid of competence that they have to hire contractors to create the process to hire contractors. Look where that led: hundreds of billions of dollars wasted in Iraq and the catastrophic failure to recover from Hurricane Katrina. Contractors got rich and nothing was delivered. Why are we emulating this failed model?
Your excellent coverage of corruption is a great start. Let’s apply the same level of insight and investigative nous in getting to the root cause of the state our society is in. — Philip Machanick, Grahamstown
Say no to victimhood
Your edition of July 22 was critically important, particularly the pieces on strikes, unionism and the plight of small businesses and their employees. Yet most significant was the article “Nonracialism and the untouchables” by Songezo Zibi. He raises points I would take issue with, but most of his opinions on the real empowerment of black South Africans are invaluable.
It’s worth repeating his conclusion that the next generation of black people “must refuse to be defined by the victimhood of colonialism and apartheid and strive for a nonracial society predicated on cohesive, successful communities that want to build a new country”. As John F Kennedy said: “Tragedy is a tool for the living to gain wisdom, not a guide by which to live.” — SC Weiss, Johannesburg
Unfestive opportunism
I challenge the figure that Grahamstown’s unemployment rate is 70% to 80% (“Grass is not so green on Fringe”, July 8). Wild exaggeration does us no good. Nor is it in the interests of the opportunists who play the begging game at festival time. My fieldwork shows that, outside of the festival, child beggars are rare and never brazen. That’s because genuine orphans and street children are catered for at safe houses. About half a dozen adults beg regularly.
The proceeds of the kids’ successful hits on visitors are rapidly spent on ice cream and junk food. — Mercia Waring, Grahamstown
Hunt on for perpetrators
The North West department of economic development, environment, conservation and tourism has noted with concern the allegations levelled against some officials of the North West Parks and Tourism Board in the rhino-poaching case in which a Thai syndicate is alleged to be involved.
It will launch an investigation into employees’ involvement and if any of the allegations are true it will take action against those involved, sending a strong message that it will not tolerate any form of illegal hunting.
All hunting permits issued by the department are done in terms of the national and provincial legislation and any misuse of such documents is in contravention of the law. — Tebogo Modise, MEC for economic development, environment, conservation and tourism, North West