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Cape Town - The ongoing platinum wage strike and the crippling ripple effect it is having on South Africa - socially, economically and politically, has sparked widespread debate among users.
Fin24 user David Hawkins suggests it is in the interests of SA businesses to collectively arrest the downward journey of South Africa.
In his response to Terry Bell's weekly Labour Wrap on the strike, he writes:
Sir, the questions I ask are and pardon my naivety:
By paying the miners their requested R12 500 per month, will it bankrupt the mining company? If yes, then close the mine down or sell it. There will be no reason to strike as the workers will have no jobs anyway.
If not then would paying this amount erode the company's profits to such a degree as to cause a run on its shares and reduce its market value?
If this is not the case I believe it is in the company's interest to get back into production and stop the haemorrhaging of losses, i.e. agree to the pay increase request, subject to a 10-year no strike agreement, which can only increase productivity.
Now let's look at the benefits to the company and national interest:
* Higher productivity for the mining company;
* Strike free agreement which will help boost productivity and
* Push the company back into making profit which will translate into;
* More corporation tax and
* More tax revenue from workers' pay for national coffers;
* More consumer spending, with the resultant
* Increase in retail trade and hopefully profits;
* Again higher tax revenue.
* Lifting more people out of poverty and into the lower- and in some cases middle classes, leading to and contributing to
* Social calmness.
I believe that it is in the interests of South African businesses and private enterprise to put their collective shoulders to the wheel and arrest the downward journey South Africa seems to be heading in - socially, economical and politically.
I look forward to your comments.
Terry Bell responds:
Hi David
Thanks for the queries. In the first place, the strike affects the three major platinum mines (Amplats, Implats and Lonmin). Together they produce the bulk of the world's platinum and South Africa sits on about 70% of world reserves of this metal that, although it is recyclable, remains in steady demand.
So there is no chance of closing down and moving on. Whether the R12 500 entry level wage is affordable is one of the main arguments that the union has taken on board by offering to have it phased in over four years.
I would imagine, if such a deal was accepted, it would include an effective no-strike agreement for that period.
Even at this stage, the immediate application of such a wage increase would not bankrupt the companies, but it would put considerable pressure, especially on Lonmin that recently embarked on an extensive expansion programme.
However, the social aspects of the South African migrant labour system need to be confronted as well and this would involve authorities outside of the companies as well.
It's a vey complex situation, but one that urgently needs to be dealt with or, as
you say, we may not arrest a downward slide.
Regards
- Fin24
* Terry Bell is an independent political, economic and labour analyst. Views expressed are his own. Follow him on twitter @telbelsa.
Disclaimer: All articles and letters published on MyFin24 have been independently written by members of the Fin24 community. The views of users published on Fin24 are therefore their own and do not necessarily represent those of Fin24.
Fin24 user David Hawkins suggests it is in the interests of SA businesses to collectively arrest the downward journey of South Africa.
In his response to Terry Bell's weekly Labour Wrap on the strike, he writes:
Sir, the questions I ask are and pardon my naivety:
By paying the miners their requested R12 500 per month, will it bankrupt the mining company? If yes, then close the mine down or sell it. There will be no reason to strike as the workers will have no jobs anyway.
If not then would paying this amount erode the company's profits to such a degree as to cause a run on its shares and reduce its market value?
If this is not the case I believe it is in the company's interest to get back into production and stop the haemorrhaging of losses, i.e. agree to the pay increase request, subject to a 10-year no strike agreement, which can only increase productivity.
Now let's look at the benefits to the company and national interest:
* Higher productivity for the mining company;
* Strike free agreement which will help boost productivity and
* Push the company back into making profit which will translate into;
* More corporation tax and
* More tax revenue from workers' pay for national coffers;
* More consumer spending, with the resultant
* Increase in retail trade and hopefully profits;
* Again higher tax revenue.
* Lifting more people out of poverty and into the lower- and in some cases middle classes, leading to and contributing to
* Social calmness.
I believe that it is in the interests of South African businesses and private enterprise to put their collective shoulders to the wheel and arrest the downward journey South Africa seems to be heading in - socially, economical and politically.
I look forward to your comments.
Terry Bell responds:
Hi David
Thanks for the queries. In the first place, the strike affects the three major platinum mines (Amplats, Implats and Lonmin). Together they produce the bulk of the world's platinum and South Africa sits on about 70% of world reserves of this metal that, although it is recyclable, remains in steady demand.
So there is no chance of closing down and moving on. Whether the R12 500 entry level wage is affordable is one of the main arguments that the union has taken on board by offering to have it phased in over four years.
I would imagine, if such a deal was accepted, it would include an effective no-strike agreement for that period.
Even at this stage, the immediate application of such a wage increase would not bankrupt the companies, but it would put considerable pressure, especially on Lonmin that recently embarked on an extensive expansion programme.
However, the social aspects of the South African migrant labour system need to be confronted as well and this would involve authorities outside of the companies as well.
It's a vey complex situation, but one that urgently needs to be dealt with or, as
you say, we may not arrest a downward slide.
Regards
- Fin24
* Terry Bell is an independent political, economic and labour analyst. Views expressed are his own. Follow him on twitter @telbelsa.
Disclaimer: All articles and letters published on MyFin24 have been independently written by members of the Fin24 community. The views of users published on Fin24 are therefore their own and do not necessarily represent those of Fin24.
