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'Ludicrous' to suggest that unions can save jobs

Labour Q&A with Terry Bell

Fin24 user Peter Dexter believes it is ludicrous to suggest that the country's unions can help save jobs.

Responding to Terry Bell's column “Inside labour - Steeling ourselves for further calamity", Dexter writes:

To suggest that our unions can help save jobs is ludicrous. The function of a union is to fight for better working conditions and higher wages for those who are employed. This is fine when the country doesn’t have massive unemployment.

The consequence of union action is less people being employed on better packages, with more mechanisation. In short, jobless growth. This results in a greater gap between the “haves and have nots” and a less stable society. So the downward spiral continues.  
 
The bottom line is that South Africa cannot afford its unions (or unqualified members of parliament and cabinet ministers).  The economic law of supply and demand is like the law of gravity. When you attempt to break it, you suffer the consequences.

Jumping off a building and hoping not to fall is naive, but our unions seem to think that they can break the law of supply and demand with impunity. This is impossible without bankrupting the country, but they are determined to march on.  South Africa has a massive oversupply of labour (unemployment). When you have an oversupply of anything, the price will drop or the oversupply will increase. If you increase the price during a period of oversupply, you will exacerbate the oversupply. 

This is what our unions have been doing in sectors which are under pressure from commodity price issues. Then they hold marches calling for jobs. In addition, our labour is unproductive and militant. This does nothing to attract investment in labour intensive businesses but much to dis-incentivise such investment, and results in outsourcing of manufacture to countries with productive, competitive labour.

Our labourers are competing with these foreign labourers. We desperately need to employ our people but unions’ demands result in business closures and departure of investment funds. This results in negative growth, a weakening of our currency, and the consequential effect of rising inflation.
 
No government can control the macro-economic environment, but must respond to issues like commodity prices, the oil price, global growth and international interest rates. South Africa, the business community and its workers have to recognise that they are all competing with their counterparts in the rest of the world.
 
South Africa needs unions for the unemployed. Unions who fight for a free and flexible labour market with low taxation which will attract labour intensive manufacturing industries to relocate to South Africa. This is the only way we will be able to employ the millions of unemployed people and start growing the economy and give our people skills and dignity.

* Add your voice or just drop Terry a labour question. Follow Terry on twitter @telbelsa.

Disclaimer:

All articles and letters published on Fin24 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.

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