Clearing up some of the SA ‘strike season’ murk

Posted on September 6, 2013

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In the face of double-digit wage demands, strikes and strike threats, even more murk than usual seems to surround the issues in play. And on both sides of the employer/employee divide there appears to be a greater than ever tendency to be blind to reality and to battle publicly on a simplistic and superficial level.

The best example of this superficiality is the much publicised 60 to 120 per cent pay demand by unions against the 6.5 per cent offered by gold mine bosses. This is a caricature of reality, implying that all workers on the mines fit into a single category and that the pay demand and offer should apply equally to all.

In the first place, there are various skills among miners and these are rewarded by differing grades and levels of pay. So it is not surprising that the United Association of South Africa that represents a relatively small number of generally highly skilled and higher paid mine workers, accepted the 6.5 per cent pay offer.

The National Union of Mineworkers (NUM), like the Association of Mineworkers and Construction Union (Amcu), represents mainly lower paid workers. The NUM demand is for a R3 000 a month increase for underground workers and R2 300 for those labouring on the surface.

But this demand is based on the claim that R4 700 is the current minimum wage, a figure that several mining company executives maintain is “too low”; that the minimum rate on many mines is “substantially higher”. More accurately put, the NUM demand is that underground workers be paid at least R7 700 a month and surface workers some R700 less.

Amcu did not join the strike this week and continues to campaign for minimum wages of R12 500 and R11 500 respectively. The union plans a mass meeting on Sunday to “get the views and the mandate of members”.

However, both Amcu and NUM also want the number of pay grades reduced and improvements made to various benefits across all grades. “It is much more complex than just a minimum pay demand and percentage offer,” notes one union negotiator.

However, the publicity surrounding the current dispute has once again encouraged a hoary argument about collective bargaining. It holds that such bargaining, because it tends to establish a level of minimum pay, is crippling job creation; that if people who were prepared to work for lower pay were allowed to do so, more jobs would be created.

But this is a myth. As unions continue to point out, employers are not in the business of hiring more labour than is absolutely necessary to complete the work at hand.

Under current labour legislation, there is also the provision for waivers of minimum rates of pay determined by collective and centralised bargaining. This has been clearly illustrated in recent years, particularly within the textile and garment industry.

So collective bargaining, in and of itself, cannot be a problem for job creation. And there is clearly no direct correlation between pay rates and job creation other than, perhaps, in the field of domestic service. And where there is no minimum protection in terms of wages and conditions, domestic work can become virtual chattel slavery.

However, in the productive economy, there is a correlation between labour costs and the speed at which jobs are lost through the introduction of machines. It is here that many of the unions appear to lose sight of reality, reacting in a traditional, knee-jerk fashion in circumstances that have radically changed.

This applies now in the mining sector and especially with gold mining. Extracting the metal in South Africa means working below the earth’s crust to depths of up to 4km.

The cost of winning ore at such depths is enormous, both in financial and human terms. Quite simply, people should not have to labour in stygian environments where, to make conditions just bearable, massively expensive refrigeration is essential.

And, however much they may deny it, the human factor, outside of its impact on the bottom line, does not much concern mining companies — and there is considerable historical evidence to support this contention. Which does not mean that the increasing use of mechanisation to displace deep-level miners will not be presented in humanitarian terms; that is part of the public relations function of modern business.

The march of automation, of mechanisation, is also inevitable, along with consequent job losses. As businessman and political commentator Moeletsi Mbeki noted this week: “One can no more stop casualisation or the decline of the mining labour force than the Luddites could stop mechanisation of textile production.”

He was referring to the rebellion by skilled British textile workers more than 200 years ago. Faced with job losses because of the introduction of new machinery, usually operated by many fewer workers who were both lower paid and less skilled, groups of skilled workers attacked textile mills and smashed the new machinery.

These “Luddites” were not opposed to progress; they wished only to keep their jobs, their pay and conditions of work. But, faced with unemployment, they reacted to the situation rather than trying to devise a proactive approach that might accommodate the inevitable “march of progress”.

Mbeki points out that in London 50 years ago, the construction industry was faced with large-scale casualisation and the use of labour brokers. A number of unionised building workers reacted this by setting up “labour only” co-operatives.

“These co-ops made it difficult for capitalists to suppress wages and they also eliminated the middleman or labour broker. Why can’t that be done here?” he asks.

It is a good question, especially since a considerable percentage of labour, even in the mining sector, now comprises “contract” or casual work. And it is here that lower wages tend to predominate.

But when many permanent staff even in urban areas earn less than R3 000 a month, establishing a minimum “living wage” seems essential. And the best vehicle to do so remains collective bargaining.