South Africa: business pushes labour accord


By Norm Dixon

JOHANNESBURG — There is a none-too-subtle campaign under way here to convince black workers that they are overpaid, unproductive and too ready to take industrial action. These factors make South Africa "uncompetitive" say a growing chorus that includes local big business and their hired scribes, the World Bank and even the US ambassador.

"Wage restraint" is the cry as spokespeople from South Africa's largest companies point out that workers wages in Indonesia, Malaysia or Bangladesh are below South African workers'. They fail to point out, however, that salaries for senior managers and company directors in South Africa compare nicely with the high rollers in the boardrooms of New York, London or Paris.

These calls come at a time when workers are mobilising for a living wage and an end to racism on the job. A key demand is the rapid elimination of racist pay scales and barriers to promotion. With the fall of political apartheid, workers and their trade unions are beginning to challenge economic apartheid.

While most attention has been focused on the apartheid system's denial of the black majority's political and social rights, the underlying objective of these discriminatory measures was to guarantee that South Africa's capitalists enjoyed the cheapest possible wage labour with little resistance from black workers. Many foreign companies invested in South Africa to take advantage of this race-based super exploitation.

The economically privileged are attempting to convince black workers and the ANC-led government of national unity, that real wage increases for the black majority will damage the South African economy's "international competitiveness". However, the truth remains that South Africa's ruling class continues to make big profits on the basis of paying black South African workers very poorly.

The employers' message is plain: reconstruction and development will not easily come from bosses giving up their apartheid-derived profits. According to their theory, workers' living standards will rise only after local and foreign investment increase and this will be dependent on workers tightening their belts.

The drum beat of dire warnings began soon after the upsurge in industrial action. "If we have major strike action and a labour offensive, this will be extremely damaging to foreign investor confidence and could detract from the government's growth objective", said Standard Bank chief economist Nico Czypionka on July 14 soon after Pick 'n Pay workers walked out. His warnings were echoed by the Afrikaanse Handelsinstituut (the organisation of Afrikaner capitalists), the Nedcor banking group and the South African Chamber of Business.

Within days, these warnings shifted to the threat of wage increases not linked to increased productivity. This is what Azer Jammine, the executive director of the Johannesburg-based Econometrix "think-tank" told a investment conference in the United States on July 19. Addressing the gathering of world bankers and financiers he said that the Reconstruction and Development Program (RDP) offered "vast" business opportunities and "incredible potential" as low-cost houses, new electricity networks and public transport systems were constructed. It was essential, however, that the government "liberalise trade, abolish foreign exchange controls, restrain wage demands and control the growth of the public service".

A decisive voice was added when the World Bank released "Reducing Poverty in South Africa" in Washington in mid-July. The report claimed that 400,000 jobs had been lost in South Africa between 1979 and 1990 because of wage rises won by a strongly unionised and militant work force.

The World Bank went further and urged the government, business and trade unions to agree to enter into a pact to eliminate South Africa's "conflict-ridden" industrial relations. It hinted that workers should agree to forgo wage increases in return for training and other "social benefits"; workers were being asked to pay for the skills denied them by apartheid education and racist job reservation.

By the beginning of August, the big business press began to opportunistically attribute the lack of foreign investment to strike action and "unrealistic" wage claims. "In the Far East, labour costs are far lower than in SA," chairperson of the Rembrant conglomerate Johann Rupert told his shareholders. "In Indonesia the going rate is $5 a day for a six-day week. Where would you invest if you were an international industrialist?"

Such statements ignore the fact that, despite copious promises of impending investment and loudly reported "encouraging" statements by big overseas companies, few concrete investments have been made. The much promised foreign aid and easing of trade barriers by the US and Europe has also failed to materialise.

The July 24 editorial in Business Day, South Africa's leading financial journal, admitted that: "Most developing countries encouraged to implement political and economic reforms by the developed world have found that promises always fall short of performance". On August 3, the New York Times noted that last year "the advance scouts of Western money brought an alluring message: make peace and take the free-market pledge and a thousand projects will bloom". Despite doing just that, the Times went on, the promised surge of investment did not happen.

In New York Times' front page article reported that overseas investors "have found a host of reasons to stay away" from South Africa. These included a "costly, unskilled and militant" work force, protectionism and doubts about the ANC-led government's long-term "commitment to capitalism".

The US ambassador to South Africa, Princeton Lyman, chimed in. "This is a testing time for South Africa," he told the Johannesburg Star on August 4. He advised the South African government to resolve wage disputes "in a way that does not set off a major inflationary cycle or leads to widespread labour unrest".

Ruling class support for a social contract is firming. Business Day endorsed the concept on July 24. The Star's Washington-based columnist, Peter Fabricus, pointed out on August 4 that the RDP was not a social contract. The RDP "was not yet extensive or detailed enough" and did not "explicitly include labour and business. Without an explicit tripartite pact on wages, why should workers not have resorted to their traditional method of bargaining?" He said South Africa should "mobilise its new-found political negotiating strengths to produce ... the socio-economic pact" suggested by the World Bank. "Anyone for Econo-Codesa?" he asked.

Speaking in parliament on August 10, National Party leader FW de Klerk called for an "economic accord between the main players in the economy — the government, the private sector, employers and employees" to counter "ruinous industrial action". He said the accord should convince workers their "quality of life" would improve and also assure employers that their "interests would be served".

Meanwhile, a study by the Cape Town-based Labour Research Service has revealed how the massive salaries paid to managers and directors in South Africa has skewed surveys that seek to compare wage levels and productivity internationally. The study found that the average minimum wage in manufacturing was R11,908 a year (A$4800, a figure that includes much better paid white skilled workers) compared to R156,000 (A$62,000) for a works' manager. NUMSA organiser Gavin Hartford points out that plant managers internationally earn between 2.5 and 3.5 times more than factory workers, while in South Africa managers are paid between six and 10 times more. There are also many more layers of management.

COSATU researcher Neva Seidman Makgetla also notes that "on average 60% of renumeration in South Africa goes to management. That is a very high share by international standards and surely reflects the way apartheid stratified the labour force. It follows that substantial improvements in pay for ordinary workers would not push up total labour costs too much — if demands at the top end of the scale become more reasonable".