Struggle for better wages must go global to succeed in SA

On the one hand real wages are too low for families to live on, but on the other companies struggle to be competitive. This is in part because of the great reduction in tariff protection as a consequence of World Trade Organisation agreements and the global mobility of capital, leaving enterprises often unwilling or unable to pay much more in order to maintain profitability. The Stellenbosch based Bureau for Food and Agricultural Policy (BFAP) in a recent study found that seasonal workers were earning no more than R89 per day while the average farm would not be able to afford a minimum wage increase of more than R20, despite the real need for substantially higher wages.

R89 per day is about R1,700 per month. Yet low as it is, in neighbouring Lesotho clothing workers producing Levi's jeans for the US earn scarcely R1,000 per month! And there are many countries in the world such as Vietnam, Cambodia, Bangladesh, China and India where agricultural workers earn less than in South Africa. The truth is that for workers producing fruit, wine and other commodities that make up South Africa's R6 billion worth of agricultural exports each year, wages are relatively high by global standards; $9 per day in a world where many earn only $2 or $3 per day. Not surprisingly then, BFAP found that most farmers could not viably pay more than R110 rand per day, an amount they recognise is insufficient for a family to eat, clothe, house and educate themselves.

The Trade Union movement and COSATU is one of the great achievements of the working class in the struggle against apartheid. The result has been the Labour Relations Act and much other legislation that protects workers. More than legislation, COSATU represents the social weight of the working class and the poor. Though they don't hold power, their presence in society is a daily nightmare for our rulers both in government and business who have to constantly look over their shoulder to check the working class reaction to their practices and policies. The problem we face is that most countries, including almost all our immediate neighbours don't share these labour standards and rights. Globally we see the working class increasingly asserting its presence, yet mostly this is not yet enshrined in law and institutions as has happened in SA. In general, SA is an island of freedom and rights in a sea of much more heavily constrained and rightless labour. Surely this should cause alarm bells to ring? How sustainable is it? And is there a way out, or at least a way forward?

Our economy has not really grown in several years and there is consensus that the about 2.5% “growth” has been mainly unproductive (and actually wasteful) state employment while many productive sectors have reduced employment. The Marikana tragedy, the farm chaos and Amplats all point in the same direction: the low wage unskilled economy of SA is dying. This is the conclusion the BFAP study has come to for agriculture as well:

South Africa's agricultural sector has long been dependent on cheap and unskilled labour. However, it is becoming clear that this system will not survive into the future, which will be characterised by fewer, more skilled and better paid workers

The study correctly concludes:

It has become evident with the current spate of labour unrest that public policy is not geared to ease this transition for either the workers or the farmers: in fact there is hardly any evidence that the problem itself is recognised among the different role players.

They are spot on. Our political leaders of all stripes but most especially government seem oblivious to how globally integrated South Africa is in the world today. The ANC in particular seems to believe that it can create a regulated “Capitalism in One Country”, which will function as it dictates and not as the global system dictates. They cannot. And if the ANC and COSATU continue down the present path of calling for boycotts of SA fruit and wine and of threatening the likes of Amplats, they will end up, as Moletsi Mbeki has argued, “de-industrialising” SA.

So how to think positively about the dilemma of low paid, unskilled but highly enfranchised labour? First, as BFAP argues, we need to accept that loss of low paid employment in export sectors is a good thing. So long as producers are able to mechanise and automate and increase productivity they will be able to compete and grow. We should encourage them to do so. Without globally competitive and efficient producers the economic backbone which sustains our infrastructure and generates tax revenue will shrink, further entrenching a poor and excluded underclass. We need to accept that it will increasingly become the state's responsibility to employ the unskilled and semi-literate in public works programmes, while making every effort to provide real training opportunities and that productive profitable enterprises and their employees will need to pay for this through taxation.

Next our leaders need to recognise that the struggle for better wages and conditions for farm, mine and other low paid workers cannot be waged only in South Africa with mainly SA producers and companies as the targets. It has to be waged globally. How? Well one way would be by insisting that a uniform set of labour standards and purchasing power equivalent wages be paid to producers of all goods to be exported. The World Trade Organisation must be reformed so that goods exported from countries that don't conform to these standards would attract tariffs to level the playing fields. This is no far-fetched dream. As Department of Trade and Industry bureaucrats have told me, it was in fact on the agenda of the WTO up to 1996 when the US corporate hunt for low wages and the eagerness of China to industrialise combined to kick it off the agenda. However times have changed. Both the US and China now have good reason to support uniform labour standards in exports to grow their domestic markets, sustain employment and keep the manufacturing industry from moving to other low wage competitors. (By the way a small financial transactions tax would also help pay for this from a sector not presently taxed and would also discourage speculation.)

COSATU and its allies needs to lead a campaign to make the argument before the WTO and its key countries including SA's “allies” in Brazil and China that free trade unions, fair wages and labour standards should be universal. This is a campaign that could unite people in an extraordinary way just as the campaign to end slavery did back in the 19th Century, another campaign held to be impossible by the cynics of the time.

Of course this says nothing about people producing for the local market. There lower standards and wages would still be possible, even desirable, to allow for the absorption of unskilled labour. One thing is certain. There is no re-distributive silver bullet which can solve this problem. It has to be solved through production. We need leaders who can explain this well, help our country understand it and in the process pull together a coalition of forces that can help SA change course.

Jack Lewis is a farmer, political economist and the former director of Community Media Trust.