Wages & the need for financial disclosure

Posted on May 13, 2018

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It is not in the interests of either employers or employees to have profitable enterprises collapse. That is a simple truth, since both parties rely on the ongoing success of any business in which the parties are mutually involved. This is the nature of the system in which we all survive.

So the frequent claims by employers and their supporters that union demands for better pay and conditions undermine the survival of business should be seen for what they are: simplistic propaganda. Workers want — and need — jobs and, in most cases, this is a need far greater than that of the bosses for more profit.

In the broader economy, workers frequently operate on the breadline, in many cases living from day to day, while often heavily indebted managers live sometimes insecure lives at a higher financial level. In contrast, directors and investors seek only to add to their dividends, bonuses and profits. This is the reality of our stratified society.

And in this society, what workers, whether bus drivers, miners or general labourers want, is a fairer share of the wealth that accrues from their labour. They can readily point to the fact that the gap between them and the rich minority has grown into a vast gulf in recent years; that economic growth has occurred, and has filtered upwards, not down; that the rich have become richer while the poor have fallen even further behind.

It is against this background that the recent strikes and protests, in South Africa, including arguments about the proposed minimum wage, should be seen. In his May Day speech, President Cyril Ramaphosa admitted that a minimum of R20 an hour was “not enough”. However, he noted that to put the wage higher would have meant the closure of businesess and the consequent loss of even more jobs.

This is simply untrue. What Ramaphosa failed to mention — and it is a fact included in all pay and benefits deals — is that there exists an exemption clause.

Because it is neither in the interests of employers nor labour to see a business go under, exemption from existing legal requirements is permitted. It is for this reason that calls — most recently from the National Union of `Metalworkers (Numsa) — for the full disclosure of the financial details of businesses be made public.

It is certainly galling for workers earning less than R100 000 a year to hear that the chief executive of the company they labour for is paid R20 million or more; that shareholder dividends have continued to soar while they continue to struggle to make ends meet. This situation is by no means unusual: economic growth over past decades has gone disproportionately to the already wealthy.

One of the arguments is that much of this profit goes to institutional investors and that, among these, are pension funds of the very workers who earn relatively little. This is true: but it is again a case of worker money helping to sustain an exploitative system while providing a few crumbs in the form of deferred wages in retirement.

So the call by workers for full public disclosure of company finances — including the payment, perks and various tax dodges of executives — seems perfectly valid. On this basis it would be possible to assess whether the pay and benefit demands by unions are reasonable or not.

Such disclosure would also enable the broader public to judge, based on facts. As matters now stand, we often face slick public relations outpourings that distort reality as they attempt to manipulate pubic opinion.

Full disclosure of all facts from all sides is what we need.