COSATU rejects accord proposal


By Norm Dixon

Following the South African government's June 14 economic policy statement, a key component of which was the call for "wage moderation", ANC labour minister Tito Mboweni has endorsed a proposal for an "Accord for Employment and Growth" between business, government and trade unions. Such an accord would allow "regulated flexibility" of the labour market and "provide a means by which macro-economic policy and labour market policy may be coordinated".

The accord proposal was the centrepiece of a 250-page report commissioned by the Labour Ministry and presented to parliament. The report pointed to the Prices and Incomes Accord in Australia between the ACTU and the ALP government as a "similar voluntary accord" which had "some success in coping with structural adjustment".

This "success" led to a dramatic reduction in the share of national income going to wages and increase in profits. Australia now has one of the largest gaps between rich and poor in the developed world. This transfer funded a restructuring of the economy which decimated many industries, throwing tens of thousands out of work.

The ministry report proposed that business, trade unions and government strike a deal "in which the size of wage increases is placed on the national bargaining agenda alongside tangible commitments around prices, tariffs, investment, training, the social wage, supply side measures to assist exporters and other matters". Workers may moderate wage demands, the reports suggests, in return for promises by the government to increase spending on the social wage, public works or training. Business may also spend more on investment, research and development and workplace safety in return for wage restraint and higher productivity from workers and subsidies from government.

The report proposed that a South African accord "set upper and lower limits within which wage bargaining would then take place ... The distribution of the increase between job categories would remain a matter for collective bargaining."

The report one-sidedly emphasised wage restraint and rejected price controls. It also said that the extent of the employers' contribution could not be spelled out until after unions agreed to restrict their wage demands.

The Congress of South African Trade Unions on June 20 rejected the proposal. "South African workers have an extremely negative view of a 'Social Accord' in the light of the Australian experience", COSATU said in a statement. It linked the proposal to the call for wage moderation in finance minister Trevor Manuel's June 14 economic statement. "It appears the hidden intention of this [accord] includes asking workers for wage restraint. ... COSATU will not attend a conference where it will be told not to continue with the fight to close the [apartheid] wage gap or the inequalities which are based on race and sex."

COSATU also questioned the government's support for a "flexible" labour market: "We hope this flexibility is not the same as what is being advocated by the SA Foundation's [which groups together South Africa's 50 biggest companies] 'Growth For All' document. We have reason to suspect it is something close to that concept [namely] deregulation and a two-tier labour market system."

COSATU's Ebrahim Patel added that it was doubtful "whether business representatives can carry a practical mandate on such issues as prices, investment and wages". Nic Segal, a member of the commission that drafted the report and an executive of the JCI mining corporation, fuelled these doubts when he admitted that the report "overestimates what commitments can meaningfully be entered into by national-level business representatives, especially in respect of such items as investment and prices, which in the final analysis are commercial decisions by individual companies".