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Labour view: Wage deal is a sellout to poverty

Feb 19 2017 08:17
Patrick Craven

170509w NUUS BEELD SAKE Patrick Craven woordvoerder van COSATU voor die Paleis van Justisie in Pretoria, tydense die dringende hofbevel van COSATU en ICASA teen Vodacom. Foto Theana Calitz Foto 24 Gaut Storie: Cecile NelPHOTO:

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When labour federation Cosatu delayed signing the R20-an-hour minimum wage agreement, an editorial in a local newspaper said: “There was something ironic about this week’s signing by all the social partners – except Cosatu ... It was, after all, Cosatu which had long pushed for a national minimum wage (NMW), mooting it for the first time ahead of its 2012 national conference.”

For many workers, what was more than just “ironic” is how on earth Cosatu – along with labour federations Nactu and Fedusa – could ever have agreed to sign a deal which would legitimise paying poverty wages to millions of workers.

That was not the living wage that Cosatu delegates voted for in 2012, and certainly not what workers today are demanding.

South Africa’s biggest union, the National Union of Mineworkers (NUM), has registered its “disgust at the proposed amount of R3 500 per month, [which] reinforces South Africa as a haven for cheap labour, just as it was under apartheid”.

Pay of R3 500 a month is nowhere close to a living wage. Economists have calculated that South Africa’s “working-poor line” is R4 125 a month, and that 54% of full-time employees – 5.5 million workers – earn below that.

So, this wage deal, concluded by Nedlac – the consensus-seeking body comprising government, business, labour and civil society – condemns millions of workers to live below the poverty line.

Even worse, it is being suggested that the final legislation could include “exemptions” which would allow employers to pay even lower wages to certain workers.

Deputy Minister of Public Works Jeremy Cronin said the government’s position was that participants in its Expanded Public Works Programme should be excluded. “At present, they are paid R83 a day. If we increase that to R20 an hour, 310 000 will be out of work opportunities in a year.”

Thus, the first deputy general secretary of the SA Communist Party condemns a third of a million young, superexploited South Africans to dire poverty, doing jobs which should be done by paid employees.

Ann Bernstein, head of the Centre for Development and Enterprise, even complains that these proposed minimum wages are too high, using a spurious capitalist argument: “The balance of risk is that an NMW would increase rather than diminish our exceptionally high levels of poverty and inequality through job destruction in the short term and reduced labour absorption over the long term.”

She was partly answered by Imraan Valodia, chairperson of the NMW advisory panel, who said she was basing her argument on a false view that market forces dictate the price of labour, and that – like any other commodity – it is ruled by laws of supply and demand, and that if the price (wages) is too high, firms will not employ workers.

Valodia correctly dismisses her idea that “labour markets operate just like a market for tomatoes”.

He said: “Unlike a seller in a tomato market, who is easily able to go to another buyer if the price offered is too low, a relatively skilled unemployed worker has very little option (except perhaps to starve) but to take employment that is offered, however low the wage.”

But what Bernstein and Valodia are missing is the fundamental difference between a worker and a tomato: It is the workers’ labour that creates wealth and generates their employers’ profits; a tomato only acquires value because workers plough the field, plant the seeds, harvest the fruit, transport it to the markets and sell it.

At every stage in the process, value is added by the worker who sells his or her labour, but receives only a fraction of that value in wages.

The surplus value goes to the employer as profit.

So, the demand for a living minimum wage, like the R12 500 demanded by the Association of Mineworkers and Construction Union in 2012, and now by the National Union of Metalworkers of SA, is not a plea for charity but for workers to get back a bigger share of the wealth their labour creates.

If further proof were needed of why we need the new workers’ federation – to be launched in March – it is this battle for a basic living wage.



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