Class war behind Cosatu-Numsa divide

Old hat: Changed economic dynamics have undercut the standing of Cosatu among many workers. (Delwyn Verasamy)

Old hat: Changed economic dynamics have undercut the standing of Cosatu among many workers. (Delwyn Verasamy)

Looking at the reasons for the split of the National Union of Metalworkers of South Africa (Numsa) from Cosatu, it is important to distinguish between the apparent cause and the real cause of the division.

For some years now, Numsa members have refused to wear National Union of Mineworkers (NUM) T-shirts, based on an acrimonious dispute about which union should by rights organise Eskom workers. After the collapse of NUM membership to the Association of Mineworkers and Construction Union in the Rustenburg platinum belt, Numsa officials believed they should be better represented in Cosatu’s leadership than the suddenly diminished NUM.

But these are all apparent causes, and have as much to do with Zwelinzima Vavi’s romantic dalliances as Julius Malema’s expulsion from the ANC had to do with his insults to Botswana President Ian Khama. That is to say, these trivial events were interesting titbits on which commentators could hang their analysis, but there were other seismic events over which the actors ultimately had no control.

In terms of the Numsa-Cosatu split, three events warrant consideration.
First, the end of the apartheid-era police state in 1994 brought political stability and large numbers of foreign investors, whose financial capital provided the long-isolated economy with the funds needed to modernise.

That modernisation largely involved the decline of the primary agricultural and mining sectors and the emergence of the vibrant financial services and retail trade sectors. Agricultural employment fell from 2.5-million in 1994 to 686 000 in 2014. Mining employment fell from 1.4-million to 441 000 over the same period. Finance and retail now employ two million and 4.1-million workers respectively, or 40.7% of the total.

The primary consequence of the economy’s modernisation for trade unions has been a rapid increase in the cost of organising workers. In a primary economy, one large mine could employ 70 000 workers, and two union officials could easily organise those workers in one location.

By contrast, in a tertiary economy, workers in bank branches and retail outlets, easily numbering 700 in one company spread across the country, are exceptionally difficult and costly to organise.

Unions, viewed as economic entities – the revenues of which derive from membership dues and the costs from organising workers – have suffered a major economic setback because of modernisation. About 35% of union revenues now come from nonmembership fee income such as commuter insurance, funeral policies and educational loans to members’ children.

Second, the generational attitude among jobseekers has changed significantly in recent decades, not only in South Africa but also around the world. Unlike their parents’ generation, young people today are sceptical about collective bargaining and, indeed, collective action of any kind – as changes in voting behaviour among young people in the 2014 general election indicated. Fiercely individualistic, young people prefer to negotiate their wages and working conditions individually.

There are many reasons for the generational change in attitude towards collective bargaining, but most originate in changing power relations within the household. In recent decades the pay and opportunity gaps between men and women have continued their slow but steady decline, with the consequence that men have taken on a greater share of child-rearing and household duties.

Catching up to their female peers, more and more males are looking for flexibility (adaptable work schedules) and fewer and fewer men are looking for additional responsibility (management positions) in the workplace.

Many young people would rather spend their R57 monthly union dues on purchases such as cellphone calls and clothing accounts.

Thus union membership as a proportion of the national workforce has declined from 45.2% in 1997 to 25.4% today. If you exclude unionisation of the government-sector workforce, unionisation is just 12.6% of the total, or one in eight workers. Last year, when employment rebounded from the 2008-2009 global financial crisis, trade unions lost 300 000 members – 9% of the unionised workforce. There are now more union members in the public sector than in the entire private sector put together.

Third, South Africa’s working class has been rapidly declining and the black middle class has been rapidly growing. In 1994 there were 1.8-million people in the black middle class; today it’s 5.9-million. Between 2000 and 2014, the number of high-earning black South Africans (those earning more than R400 000 a year in today’s money) has increased from 120 000 to 1.8-million, with 88.6% of these in the private sector.

The middle class has fundamentally different values to the working class, including upward job mobility (as opposed to the working-class value of job security); home ownership; saving for retirement; independence from government financial assistance; and high-quality government services in policing, schooling and healthcare.

The black middle class very nearly caused the ANC to lose Gauteng in the May elections.

Of these three seismic changes, there is no question that the growth of the black middle class will be the central social, economic and political event of 21st-century South Africa – much as the emergence of whites out of poverty was the central event of 20th-century South Africa.

No doubt presidents Nelson Mandela and FW de Klerk were central figures in the demise of apartheid, but, equally, the stagnation of white middle-class living standards over two decades from 1970 to 1992 played a decisive role in creating the political space in which democracy became, for whites, not only possible but desirable.

We can predict some of the political platforms that will attract the black middle class in future. Foremost is good schooling. It is an outrage to many black people (though they may not frame it this way) that the interests of 386 000 unionised teachers trump the interests of 12.3-million pupils.

Teachers’ unions have banished inspectors from classrooms and refused to allow pupil performance to be used as a measure of teacher performance. They were the prime movers in reducing pass grades to boost pass rates artificially. They made strategic use of “closed” and “agency” shop agreements, which compel workers to join a union as a precondition for getting a job, or to pay union dues whether they belong to the union or not.

It is now possible in a government school for a teacher to be appointed, without being interviewed by the principal. If education is the single most important factor not only in obtaining that first job, on which one’s entire career depends, but also in the promotion of civic virtues such as an effective state, it is easy to see how the teachers’ union is the leading cause of inequality of income and opportunity between the races in post-apartheid South Africa.

The black middle class is, of course, voting with its feet. Last year enrolments at low-fee private schools, which employ retired teachers and charge about R350 a pupil a month, shot up by 27%, whereas government school enrolments fell by 6% and school closures abound.

Another platform that will attract the black middle class is privatisation. Calculations show that the privatisation of all state-owned enterprises and selected municipal services would put R169 000 in cash in the hands of each of South Africa’s 9.1-million households (about R1.5-trillion in total), which would overnight propel the black middle class from 5.9-million to 11.2-million.

Though they may not use the word, middle-class black South Africans are acutely aware that the call for nationalisation from working-class blacks is a pretext for unionising – by force – large chunks of the private sector workforce, including banking and insurance.

Here, middle-class blacks are torn between their ideological misgivings about free market capitalism, gleaned from their working-class parents, and the reality of a state sector in an advanced stage of collapse. Here, again, the black middle class is voting with its feet.

It is genuinely likely that Gauteng will fall to the Democratic Alliance in 2019 – and, in fact, would have done in 2014 if it had not been for late vote counting, mainly in Soshanguve. This presents a real possibility that Cape Town and Johannesburg, representing nearly 50% of national income, will be in the hands of the opposition in just a few years.

The challenge for the ANC is whether to follow the dwindling working class, as it is currently doing, or to embrace the emerging middle class, which will involve a complete turnaround in its political and economic agenda.

Already the middle class, white and black, is more numerous: 10.5-million white-collar workers to five million blue-collar workers. There is, of course, the vast sea of unemployed people (7.7-million), who swing the ANC’s electoral calculus in favour of the working class – but only just.

The Numsa-Cosatu split, then, is much more complex than it at first appears. It is a battle for the heart of the ANC. It involves the long wave of South Africa’s economic history. It sets the working class against the middle class in an epic battle of interests. It’s about everything but the details.

Loane Sharp is an economist

Looking at the reasons for the split of the National Union of Metalworkers of South Africa (Numsa) from Cosatu, it is important to distinguish between the apparent cause and the real cause of the division.

For some years now, Numsa members have refused to wear National Union of Mineworkers (NUM) T-shirts, based on an acrimonious dispute about which union should by rights organise Eskom workers. After the collapse of NUM membership to the Association of Mineworkers and Construction Union in the Rustenburg platinum belt, Numsa officials believed they should be better represented in Cosatu’s leadership than the suddenly diminished NUM.

But these are all apparent causes, and have as much to do with Zwelinzima Vavi’s romantic dalliances as Julius Malema’s expulsion from the ANC had to do with his insults to Botswana President Ian Khama. That is to say, these trivial events were interesting titbits on which commentators could hang their analysis, but there were other seismic events over which the actors ultimately had no control.

In terms of the Numsa-Cosatu split, three events warrant consideration. First, the end of the apartheid-era police state in 1994 brought political stability and large numbers of foreign investors, whose financial capital provided the long-isolated economy with the funds needed to modernise.

That modernisation largely involved the decline of the primary agricultural and mining sectors and the emergence of the vibrant financial services and retail trade sectors. Agricultural employment fell from 2.5-million in 1994 to 686 000 in 2014. Mining employment fell from 1.4-million to 441 000 over the same period. Finance and retail now employ two million and 4.1-million workers respectively, or 40.7% of the total.

The primary consequence of the economy’s modernisation for trade unions has been a rapid increase in the cost of organising workers. In a primary economy, one large mine could employ 70 000 workers, and two union officials could easily organise those workers in one location.

By contrast, in a tertiary economy, workers in bank branches and retail outlets, easily numbering 700 in one company spread across the country, are exceptionally difficult and costly to organise.

Unions, viewed as economic entities – the revenues of which derive from membership dues and the costs from organising workers – have suffered a major economic setback because of modernisation. About 35% of union revenues now come from nonmembership fee income such as commuter insurance, funeral policies and educational loans to members’ children.

Second, the generational attitude among jobseekers has changed significantly in recent decades, not only in South Africa but also around the world. Unlike their parents’ generation, young people today are sceptical about collective bargaining and, indeed, collective action of any kind – as changes in voting behaviour among young people in the 2014 general election indicated. Fiercely individualistic, young people prefer to negotiate their wages and working conditions individually.

There are many reasons for the generational change in attitude towards collective bargaining, but most originate in changing power relations within the household. In recent decades the pay and opportunity gaps between men and women have continued their slow but steady decline, with the consequence that men have taken on a greater share of child-rearing and household duties.

Catching up to their female peers, more and more males are looking for flexibility (adaptable work schedules) and fewer and fewer men are looking for additional responsibility (management positions) in the workplace.

Many young people would rather spend their R57 monthly union dues on purchases such as cellphone calls and clothing accounts.

Thus union membership as a proportion of the national workforce has declined from 45.2% in 1997 to 25.4% today. If you exclude unionisation of the government-sector workforce, unionisation is just 12.6% of the total, or one in eight workers. Last year, when employment rebounded from the 2008-2009 global financial crisis, trade unions lost 300 000 members – 9% of the unionised workforce. There are now more union members in the public sector than in the entire private sector put together.

Third, South Africa’s working class has been rapidly declining and the black middle class has been rapidly growing. In 1994 there were 1.8-million people in the black middle class; today it’s 5.9-million. Between 2000 and 2014, the number of high-earning black South Africans (those earning more than R400 000 a year in today’s money) has increased from 120 000 to 1.8-million, with 88.6% of these in the private sector.

The middle class has fundamentally different values to the working class, including upward job mobility (as opposed to the working-class value of job security); home ownership; saving for retirement; independence from government financial assistance; and high-quality government services in policing, schooling and healthcare.

The black middle class very nearly caused the ANC to lose Gauteng in the May elections.

Of these three seismic changes, there is no question that the growth of the black middle class will be the central social, economic and political event of 21st-century South Africa – much as the emergence of whites out of poverty was the central event of 20th-century South Africa.

No doubt presidents Nelson Mandela and FW de Klerk were central figures in the demise of apartheid, but, equally, the stagnation of white middle-class living standards over two decades from 1970 to 1992 played a decisive role in creating the political space in which democracy became, for whites, not only possible but desirable.

We can predict some of the political platforms that will attract the black middle class in future. Foremost is good schooling. It is an outrage to many black people (though they may not frame it this way) that the interests of 386 000 unionised teachers trump the interests of 12.3-million pupils.

Teachers’ unions have banished inspectors from classrooms and refused to allow pupil performance to be used as a measure of teacher performance. They were the prime movers in reducing pass grades to boost pass rates artificially. They made strategic use of “closed” and “agency” shop agreements, which compel workers to join a union as a precondition for getting a job, or to pay union dues whether they belong to the union or not.

It is now possible in a government school for a teacher to be appointed, without being interviewed by the principal. If education is the single most important factor not only in obtaining that first job, on which one’s entire career depends, but also in the promotion of civic virtues such as an effective state, it is easy to see how the teachers’ union is the leading cause of inequality of income and opportunity between the races in post-apartheid South Africa.

The black middle class is, of course, voting with its feet. Last year enrolments at low-fee private schools, which employ retired teachers and charge about R350 a pupil a month, shot up by 27%, whereas government school enrolments fell by 6% and school closures abound.

Another platform that will attract the black middle class is privatisation. Calculations show that the privatisation of all state-owned enterprises and selected municipal services would put R169 000 in cash in the hands of each of South Africa’s 9.1-million households (about R1.5-trillion in total), which would overnight propel the black middle class from 5.9-million to 11.2-million.

Though they may not use the word, middle-class black South Africans are acutely aware that the call for nationalisation from working-class blacks is a pretext for unionising – by force – large chunks of the private sector workforce, including banking and insurance.

Here, middle-class blacks are torn between their ideological misgivings about free market capitalism, gleaned from their working-class parents, and the reality of a state sector in an advanced stage of collapse. Here, again, the black middle class is voting with its feet.

It is genuinely likely that Gauteng will fall to the Democratic Alliance in 2019 – and, in fact, would have done in 2014 if it had not been for late vote counting, mainly in Soshanguve. This presents a real possibility that Cape Town and Johannesburg, representing nearly 50% of national income, will be in the hands of the opposition in just a few years.

The challenge for the ANC is whether to follow the dwindling working class, as it is currently doing, or to embrace the emerging middle class, which will involve a complete turnaround in its political and economic agenda.

Already the middle class, white and black, is more numerous: 10.5-million white-collar workers to five million blue-collar workers. There is, of course, the vast sea of unemployed people (7.7-million), who swing the ANC’s electoral calculus in favour of the working class – but only just.

The Numsa-Cosatu split, then, is much more complex than it at first appears. It is a battle for the heart of the ANC. It involves the long wave of South Africa’s economic history. It sets the working class against the middle class in an epic battle of interests. It’s about everything but the details.

Loane Sharp is an economist

Looking at the reasons for the split of the National Union of Metalworkers of South Africa (Numsa) from Cosatu, it is important to distinguish between the apparent cause and the real cause of the division.

For some years now, Numsa members have refused to wear National Union of Mineworkers (NUM) T-shirts, based on an acrimonious dispute about which union should by rights organise Eskom workers. After the collapse of NUM membership to the Association of Mineworkers and Construction Union in the Rustenburg platinum belt, Numsa officials believed they should be better represented in Cosatu’s leadership than the suddenly diminished NUM.

But these are all apparent causes, and have as much to do with Zwelinzima Vavi’s romantic dalliances as Julius Malema’s expulsion from the ANC had to do with his insults to Botswana President Ian Khama. That is to say, these trivial events were interesting titbits on which commentators could hang their analysis, but there were other seismic events over which the actors ultimately had no control.

In terms of the Numsa-Cosatu split, three events warrant consideration. First, the end of the apartheid-era police state in 1994 brought political stability and large numbers of foreign investors, whose financial capital provided the long-isolated economy with the funds needed to modernise.

That modernisation largely involved the decline of the primary agricultural and mining sectors and the emergence of the vibrant financial services and retail trade sectors. Agricultural employment fell from 2.5-million in 1994 to 686 000 in 2014. Mining employment fell from 1.4-million to 441 000 over the same period. Finance and retail now employ two million and 4.1-million workers respectively, or 40.7% of the total.

The primary consequence of the economy’s modernisation for trade unions has been a rapid increase in the cost of organising workers. In a primary economy, one large mine could employ 70 000 workers, and two union officials could easily organise those workers in one location.

By contrast, in a tertiary economy, workers in bank branches and retail outlets, easily numbering 700 in one company spread across the country, are exceptionally difficult and costly to organise.

Unions, viewed as economic entities – the revenues of which derive from membership dues and the costs from organising workers – have suffered a major economic setback because of modernisation. About 35% of union revenues now come from nonmembership fee income such as commuter insurance, funeral policies and educational loans to members’ children.

Second, the generational attitude among jobseekers has changed significantly in recent decades, not only in South Africa but also around the world. Unlike their parents’ generation, young people today are sceptical about collective bargaining and, indeed, collective action of any kind – as changes in voting behaviour among young people in the 2014 general election indicated. Fiercely individualistic, young people prefer to negotiate their wages and working conditions individually.

There are many reasons for the generational change in attitude towards collective bargaining, but most originate in changing power relations within the household. In recent decades the pay and opportunity gaps between men and women have continued their slow but steady decline, with the consequence that men have taken on a greater share of child-rearing and household duties.

Catching up to their female peers, more and more males are looking for flexibility (adaptable work schedules) and fewer and fewer men are looking for additional responsibility (management positions) in the workplace.

Many young people would rather spend their R57 monthly union dues on purchases such as cellphone calls and clothing accounts.

Thus union membership as a proportion of the national workforce has declined from 45.2% in 1997 to 25.4% today. If you exclude unionisation of the government-sector workforce, unionisation is just 12.6% of the total, or one in eight workers. Last year, when employment rebounded from the 2008-2009 global financial crisis, trade unions lost 300 000 members – 9% of the unionised workforce. There are now more union members in the public sector than in the entire private sector put together.

Third, South Africa’s working class has been rapidly declining and the black middle class has been rapidly growing. In 1994 there were 1.8-million people in the black middle class; today it’s 5.9-million. Between 2000 and 2014, the number of high-earning black South Africans (those earning more than R400 000 a year in today’s money) has increased from 120 000 to 1.8-million, with 88.6% of these in the private sector.

The middle class has fundamentally different values to the working class, including upward job mobility (as opposed to the working-class value of job security); home ownership; saving for retirement; independence from government financial assistance; and high-quality government services in policing, schooling and healthcare.

The black middle class very nearly caused the ANC to lose Gauteng in the May elections.

Of these three seismic changes, there is no question that the growth of the black middle class will be the central social, economic and political event of 21st-century South Africa – much as the emergence of whites out of poverty was the central event of 20th-century South Africa.

No doubt presidents Nelson Mandela and FW de Klerk were central figures in the demise of apartheid, but, equally, the stagnation of white middle-class living standards over two decades from 1970 to 1992 played a decisive role in creating the political space in which democracy became, for whites, not only possible but desirable.

We can predict some of the political platforms that will attract the black middle class in future. Foremost is good schooling. It is an outrage to many black people (though they may not frame it this way) that the interests of 386 000 unionised teachers trump the interests of 12.3-million pupils.

Teachers’ unions have banished inspectors from classrooms and refused to allow pupil performance to be used as a measure of teacher performance. They were the prime movers in reducing pass grades to boost pass rates artificially. They made strategic use of “closed” and “agency” shop agreements, which compel workers to join a union as a precondition for getting a job, or to pay union dues whether they belong to the union or not.

It is now possible in a government school for a teacher to be appointed, without being interviewed by the principal. If education is the single most important factor not only in obtaining that first job, on which one’s entire career depends, but also in the promotion of civic virtues such as an effective state, it is easy to see how the teachers’ union is the leading cause of inequality of income and opportunity between the races in post-apartheid South Africa.

The black middle class is, of course, voting with its feet. Last year enrolments at low-fee private schools, which employ retired teachers and charge about R350 a pupil a month, shot up by 27%, whereas government school enrolments fell by 6% and school closures abound.

Another platform that will attract the black middle class is privatisation. Calculations show that the privatisation of all state-owned enterprises and selected municipal services would put R169 000 in cash in the hands of each of South Africa’s 9.1-million households (about R1.5-trillion in total), which would overnight propel the black middle class from 5.9-million to 11.2-million.

Though they may not use the word, middle-class black South Africans are acutely aware that the call for nationalisation from working-class blacks is a pretext for unionising – by force – large chunks of the private sector workforce, including banking and insurance.

Here, middle-class blacks are torn between their ideological misgivings about free market capitalism, gleaned from their working-class parents, and the reality of a state sector in an advanced stage of collapse. Here, again, the black middle class is voting with its feet.

It is genuinely likely that Gauteng will fall to the Democratic Alliance in 2019 – and, in fact, would have done in 2014 if it had not been for late vote counting, mainly in Soshanguve. This presents a real possibility that Cape Town and Johannesburg, representing nearly 50% of national income, will be in the hands of the opposition in just a few years.

The challenge for the ANC is whether to follow the dwindling working class, as it is currently doing, or to embrace the emerging middle class, which will involve a complete turnaround in its political and economic agenda.

Already the middle class, white and black, is more numerous: 10.5-million white-collar workers to five million blue-collar workers. There is, of course, the vast sea of unemployed people (7.7-million), who swing the ANC’s electoral calculus in favour of the working class – but only just.

The Numsa-Cosatu split, then, is much more complex than it at first appears. It is a battle for the heart of the ANC. It involves the long wave of South Africa’s economic history. It sets the working class against the middle class in an epic battle of interests. It’s about everything but the details.

Loane Sharp is an economist

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