50 shades of black

Oct 24 2012 12:28
THE nation’s plunderer-and-philanderer-in-chief has addressed the unemployment concerns of the nation. His solution is not half bad.

Zumanomics is encouraging a return to nature for his unemployable flock, calling for a big push towards smallhold farming.

This is undeniably superior to the status quo of dependency and grant taking, so bravo on saying something not stupid, el presidente.

Smallhold farming - if successful - is a genuine better alternative for the country's millions of unemployed.

Despite Zuma couching this strategy as a way to secure SA’s food supply, which it is not, the mere removal of dependency on government is a net gain for benefactor and beneficiaries alike.

Creating gainful employment is a good thing, retaining gainful employment even better.

Without losing ourselves in pessimism and debating how this policy - even if it works - will not provide a long-term solution (when each smallhold stand is subdivided by future heirs), let’s focus on employment retention, specifically in the mining sector.

A cacophony of once-meek ANC lieutenants' vocal disenchantment is highlighting the disparity, delusion and disconnect between the people and their purported representatives.

The likes of Cosatu general secretary Zwelinzima Vavi who theoretically earns R500 000, which after cash equivalents are added more than quadruples, is no longer acceptable in the face of miners' earnings.

Unfortunately this seemingly common wisdom is camouflaging the signal with noise, avoiding the real issue.

Exploring the reality, Vavi is effectively the CEO of a significant not-for-profit entity, and even at a salary of R1m he is well within the second quartile of earners in this category - his competence aside, the salary per se is market related and justified.

Market related is an important factor to consider since many miners will become redundant due to their strikes closing down marginal shafts, so it is well worth investigating what future awaits these soon-to-be unemployed miners.

The market related salary is our launching pad into this discussion.

A miner of the lowest tier, say a rock drill operator, is now earning R12 000 thanks to successful albeit illegal wage negotiations.

If and when this miner adds a prefix to the word employed, he will be in the market for the next best option.

Our miner is not qualified for any other trade and as such will at best find work at or close to the minimum wage; in our benevolent example, we will say that wage is R6 000.

Our miner is thus currently charging a 100% premium for his labour. With unemployment officially at 25% and practically near 40%, we will optimistically assume our miner has a two in three chance of finding employment.

As such we should factor this in, and revise his salary in line with his likelihood of earning one. It recedes to a paltry R4 000 per month. So our miner is in fact earning a 200% premium on his labour, relative to his next best option.

In conventional parlance this is called sheltered employment, and in fact that is what it is.

The mining industry, burdened by exit barriers, is continuously bullied into providing sheltered inflated employment for tens of thousands of workers who would otherwise predominantly subside on state largesse.

Within the social context and development mindset this is acceptable, arguably preferred as long as mines are profitable.

To put this all into perspective, it would be very sad for the mining industry to be crushed by organised labour’s kamikaze endeavours, but most skilled employees of these mines will find alternative employment locally or overseas.

For miners and government, however, it would be an absolute tragedy, an unnatural disaster.

Our miner will be sucked into the vortex of divestment and recession with his dozen dependents in tow, and the ill-equipped government will be the saviour of last resort.

The solution is subtle.

Obviously, government needs to indulge in the polemic tripe which seems to be the only digestible material for the uneducated throngs which government incompetence has secured through their failed efforts.

But threatening to slaughter the golden goose whose eggs finance government is irresponsible and counterproductive.

Business confidence is shaky and social unrest will be around the next corner until the fundamentals are remedied.

However, if business tanks then there is NO solution to social unrest, so a word for the wise: government needs to focus gargantuan efforts into assuaging the business community both locally and internationally.

If they fail in this, the struggle for freedom will have been for naught with the masses worse off under a crueller master.

 - Fin24
mining unrest  |  sa economy



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