Stories, facts & the minimum wage

Posted on November 30, 2018


Everybody has stories. The point is the deal with the facts behind those stories. That was a message delivered at an annual management/union information sharing session in Cape Town this month arranged by the Golden Arrow Bus Company. That the message came from company CEO Francois Meyer was irrelevant because it was true, and especially so in this digital era. It is a time when we face deluges of fake news and opinion aimed at furthering specific agendas and often based on nothing but prejudice.

We had a dose of this earlier in the month when health minister Aaron Motsoaledi fanned xenophobic sentiment by claiming that foreigners were flooding South African hospitals. Detailed analysis showed this to be false. But sometimes the published challenges to claims made are just as problematic as the claims themselves.

The announced introduction of the long awaited national minimum wage provided a classic example. On the one hand, it was widely hailed as a step forward in the campaign to alleviate poverty and close the wage and welfare. On the other, free market groups condemned it as a contribution to greater job losses and the death knell for small businesses, which most workers and their unions justifiably dismiss as false.

But many accepted the announcement by President Cyril Ramaphosa implying benefits accruing to the new minimum wage. However, this also ratcheted up tensions between the four major labour federations in the country. Cosatu, the Federation of Unions (Fedusa) and the National Council of Trade Unions (Nactu) were party, in 2016, to agreeing the wage proposals and therefore support them. The SA Federation of Trade Unions (Saftu), founded in April last year, was not in existence then and has roundly condemned the proposals.

The argument by Saftu that the R20 an hour minimum wage is grossly inadequate, seems to have considerable traction, especially since that amount was first mooted within the labour movement five years ago. Even since the 2016 agreement, inflation has further lessened the buying power of the proposed minimum. However, the January introduction of a minimum wage of R20 an hour, usually punted as R3 500 a month, will not apply to the largest group of the lowest paid: domestic and farm workers, let alone the thousands earning as little as R50 a day in the expanded public works programme (EPWP).

Workers in these three categories are supposed eventually to qualify to be paid a minimum of R18 an hour for farm labour, R15 for domestic work and R11 for those under the EPWP umbrella. And, in all cases, any employer may apply, on the basis of financial hardship, to have the rate waived. In the case of farm workers, the increases gained since the turbulent strikes of 2012/13 have often been severely eroded. Many employers now charge increased amounts for accommodation, electricity and water, leaving the workers sometimes worse off than before. Similar “in kind” payments may be levied on live-in domestic workers.

There are also thousands of workers in the EPWP, one of government’s key programmes. It was introduced following the Growth and Development Summit of 2003, and aimed at “providing poverty and income relief through temporary work for the unemployed”. Instead, it soon became obvious that the programme had undermined the wages and conditions of local government workers while compromising the trade union movement that had supported its introduction. Cash strapped councils were quick to turn to much cheaper EPWP labour to handle street cleaning and other jobs formally done by permanently employed municipal workers.

But the most worrying aspect of what municipal unions have dubbed “back door privatisation” came with the outsourcing of a large area of firefighting to Mbombela-based Working on Fire (WoF) as part of the EPWP. And, on the back of the EPWP, a profitable, transnational company has grown that has, at the same time, massively reduced the rate of pay for firefighters.

This development is what firefighting organisations around the world have long warned about. They feel that firefighting and emergency medical services, since they are critical to the wellbeing of everyone, should never be in the hands of private companies. But they acknowledge that private companies, many with their bottom lines squeezed, are everywhere hovering, keen to pick up any lucrative business that may be on offer as various levels of government try to offload their service delivery obligations.

In the case of WoF this “offloading” has proved extremely profitable to parent company, Kishugu Holdings (Pty) Ltd that now operates fire fighting related services on three continents. “But for us nothing has really changed,” says a WoF firefighter. Although still apparently employed under the EPWP, he and other firefighters have worked for years in their jobs and now earn little more than R2,100 a month, with no medical aid provision.

Even at R20 an hour, they would still be paid a fraction of the rate due to other “permanent” firefighters. These are some of the facts that should make it plain why increasing numbers of workers are expressing both cynicism and anger about the stories circulating about the benefits of a R20 minimum wage, and how the EPWP provides a stepping stone to decent work with decent pay.