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▌CONTEMPLATING
PROTEST ACTION? Is your organisation
contemplating labour union driven mass action? If so, think twice. South Africa
is (in this respect) a ‘free country’, so strike if you must or believe that
strike action can help your cause. Always remember, however:
♦ South Africa is a long way
from the Americas, Europe and Asia: It may halt multinational investment in
your country and its industries.
♦ It may hurt your company’s
future prospects for business contracts.
♦ It may cost your firm its established customer
base.
♦ It may reduce your firm’s sales and/or exports.
♦ It may kill the goose that lays the very
golden egg (i.e., the production, sales, turnover, income and profits) required
to finance the very bonus, wage increase or promotion you are clamouring for and
protesting about.
♦ It may affect your remuneration negatively.
♦ It may cost you your job, your medical
benefits, accident cover, housing etc. and other perks offered by your firm;
make you homeless and unemployed for years on end
♦ It may finally force your company into
liquidation and close it down permanently.
▌WAGES,
WAGE INCREASES, PERFORMANCE BONUSES, PROMOTIONS & JOBS. Always bear in
mind that wages, wage increases, performance bonuses, promotions & jobs (including new jobs) are
financed by the organisation’s PROFITS, and not by its TURNOVER. Without
profits there can be no wages, increases, jobs or even any new jobs. It stands
to reason that the turnover must be commensurate with the firm’s size and scope
to make the kind of profits that will sustain the employee complement, but, in
the final analysis it is all about profits, the very thing socialists usually
(mysteriously) complain about most. Without profits there can be no wages, wage
increases, jobs, performance bonuses, promotions, let alone any new jobs.
▌MINIMUM
WAGE LAWS. Many workers believe that minimum wage laws will protect them
against exploitation and poverty, but it may not necessarily be the case. The
‘minimum wage’ phenomenon can be a very risky institution in the modern
workplace for a number of reasons:
♦ In the first place does it keep entry-level
candidates (school leavers, matriculants, the unemployed & homeless so
desperately in need of vocational exposure, hands-on experience and the
opportunity to inculcate the kind of work ethic that could make them
marketable for future positions) away from and out of industry.
♦ It may force employers into
large-scale mechanisation in order to afford the minimum wage wage-bill
already in existence and to stay in competition with its concurrents and
competitors in the market (locally and internationally) with the inevitable
lay-offs in the labour force.
♦ It makes it difficult, if not
impossible, for any kind of employer to employ people or keep the labour
already in its employ at a wage the employer can afford to pay, bearing in
mind that wages come out of profits, not out of turnover.
Be honest: If you are (or were you) unemployed, would you rather sit at home unemployed waiting for the phone to ring, or would you rather be employed somewhere in industry at a wage the employer reckons he can afford, where you can pick up industry exposure and work experience while inculcating a work ethic that will stand you in good stead in time to come?
Imagine leaving the firm after a few years of industry and work-related experience with a CV (Curriculum vitae/Resumé) in your hand and a testimonial from your employer to be proud of. All this could be possible were there not such a things as the selfish institution of ‘minimum wages’. There are ways such as professional registration, industry norms etc. for workers to protect their skills and jobs other than dysfunctional and selfish minimum wage laws. In her research article, ‘The Effects of Minimum Wages on Youth Employment and Income’, Charlene Marie Kalenkoski writes:
“Evidence shows that minimum wages reduce employment and create unemployment among young unskilled workers. While some youths will benefit from higher current earnings, others will not find work, delaying labor market entry and reducing lifetime incomes. Without a ‘sub-minimum training wage’ for entry-level workers, employers may limit on-the-job training, which will also reduce lifetime incomes. Instead of a minimum wage, policymakers should use less distortionary means to support young unskilled workers, such as cash or in-kind assistance.”
(IZA, World of Labor, March 2016).
Kalenkoski
lists four major negative consequences of minimum wages for youth employment:
♦ ”In a competitive labor market for young
unskilled workers, minimum wages reduce youth employment.”
♦ ”A minimum wage reduces lifetime income by
delaying the labor market entry of youths who fail to obtain jobs at the higher
(minimum) wage."
♦ “Minimum wages create youth unemployment by
increasing the number of job seekers and reducing the number of jobs
available.”
♦ ”Minimum wages reduce on-the-job training
opportunities and thus youths’ lifetime income.”
(IZA, World
of Labor, March 2016).
Do you really think, with South Africa’s
unemployment situation as it stands, that minimum wages are making a contribution
to help people into employment?
“The results of the Quarterly Labour Force Survey (QLFS) indicate that the number of employed persons increased by 258 000 to 16,2 million in the first quarter of 2023 compared to the fourth quarter of 2022. The number of unemployed persons increased by 179 000 to 7,9 million during the same quarter.16 May 2023.”
[Statistics SA, 2023].
The gist of the story: It doesn’t require a genius to realise that industry on all levels should be taking in trainees, interns, learners and of all kinds all over the country (and outside) to address the problem of massive unemployment with the freedom to decide on a wage they can afford to pay with industry norms, and not Minumum Wage Law, dictating such wages. The time is past for exclusivity in the labour market in order just to appease unionized workers and help any sitting government (no names, no pack-drill) with votes during the next national election stay in power.
▌THE DYSFUNCTIONALITY OF INDISCRIMINATE PROTEST ACTION. Let’s face it, after the protests and the violence, the destruction that usually follow in the wake of public demonstrations, negotiations, an amicable agreement may very well follow. Your employer may (if you are lucky) actually decide to forgive and forget, even shake your hand and speak to you again. The problem is, however, that the consumer won’t forget.
After the debilitating SAPO strike of some years back, many people never went back to the SAPO again. Even my bank dropped the SAPO for an in-house courier to deliver its mail. The consumer, not your employer, is king and will not forget, may never forgive. ‘Hell’ has no fury as a consumer scorned … once bitten forever shy.
So, here’s the deal: Protest if you must, but never interfere with production and the normal flow of business. The show must go on, because it is the show that, from its profits and not from its turnover (assuming there are profits) will have to pay your wages, wage increases, performance bonuses and other perks provided by your firm. You decide … did strike action of the past (including so-called ‘legal, protected’ strikes) increase or diminish your firm’s profits?
▌EXAMPLE OF THE 2022 TRANSNET STRIKE. On 15 November 2022, Mail & Guardian reported as follows under the heading, 'South Africa's strike law fails to balance competing interests':
“While the strike is over, the crippling effect on the
economy, especially those hubs centred around port activities in Durban,
Richards Bay, Gqeberha and Cape Town, will be felt for much longer. The chief
executive for the South African Association of Freight Forwarders, Dr Juanita
Maree, estimates that the strike cost R7-billion in logistics costs and that a
restoration of normal function “will only happen in early 2023”.
“She estimated
that South Africa lost the opportunity of moving R65.3-billion worth of
goods.Neighbouring harbours in Namibia and Mozambique picked up new business,
and may reap the benefit of continued trade in the future.
“The Mineral Council of South Africa estimates that the strike cost its members about R815-million a day in export revenue. Simply put, Transnet was unable to rail and load about 370 000 tonnes of iron ore, coal and manganese onto ships for international markets.”
[Norton, Dawn & Lagesse, Luke ‘South Africa’s strike law fails to balance competing interests’. Mail & Guardian. Online. 15 Nov 2022 https://mg.co.za/thoughtleader/opinion/2022-11-15-south-africas-strike-law-fails-to-balance-competing-interests/#:~:text=The%20Mineral%20Council%20of%20South,onto%20ships%20for%20international%20markets]
.
▌SOUTH AFRICA IN GENERAL. Writes Mlungisi Tenza LLB LLM LLD Senior Lecturer, University of KwaZulu-Natal:
“Violent and
lengthy strikes have devastating effects on the economy, cause injury to
members of the community and non-striking workers, and more particularly
poverty as employers would retrench workers if their businesses do not make
profit as a result of prolonged non-production. In the mining sector where
strikes are a common feature, it has been reported that employers have lost
billions of rands through lengthy and violent strikes ….
”The most prominent strike which nearly
brought the platinum industries to its knees was the strike convened by AMCU in
2014. The strike started on 23 January 2014 and ended on 24 June 2014. It
affected the three big platinum producers in the Republic, which are the Anglo
American Platinum, Lonmin Plc and Impala Platinum. It was the longest strike
since the dawn of democracy in 1994. As a result of this strike, the platinum
industries lost billions of rands.29 According
to the report by Economic Research Southern Africa, the platinum group metals
industry is South Africa's second-largest export earner behind gold and
contributes just over 2% of the country's Gross Domestic Product (GDP).30 The
overall metal ores in the mining industry which include platinum sells about
70% of its output to the export market while sales to local manufacturers of
basic metals, fabricated metal products and various other metal equipment and
machinery make up to 20%.31 The
research indicates that the overall impact of the strike in 2014 was driven by
a reduction in productive capital in the mining sector, accompanied by a
decrease in labour available to the economy. This resulted in a sharp increase
in the price of the output by 5.8% with a GDP declined by 0.72 and 0.78%.32 …
“South Africa's primary source of income is
through employment; the state relies heavily on the income taxes it collects
from employed people. The implication is that unemployment has a negative
effect on the state while if more people are employed, their income tax will
add to the government's coffers. Unemployment means that people are unable to
support themselves and their families, conversely the state has an obligation
of ensuring that such people sustainable means in the form of social
assistance."3
[Scielo.Org.za.
‘The effects of violent strikes on the economy of a developing country: a
case of South Africa’.
Online.
http://www.scielo.org.za/scielo.php?script=sci_arttext&pid=S1682-58532020000300004
▌SUMMARY.
1. Jobs, wages, wage increases, performance
bonuses, perks, promotions and new jobs are funded by a company’s PROFITS, not
by its turnover. No PROFITS … no jobs, no wages, no wage increases, no perks,
no promotions etc.
2. The CONSUMER is KING, not your boss nor the
owner of the firm. The CONSUMER will decide whether your firm’s product(s)
is/are worth buying in terms of product quality, functionality
(fit-for-purpose), availability and price. Remember this adage when you decide
to strike: “Hell hath no fury as KING CONSUMER scorned.”
3. The moral of the story is: Strike if you really must, but NEVER interfere with production. The SHOW must go on because it is the SHOW that lays the golden egg that will have to fund the very thing you are striking about.
4. As far as government is concerned, remember that state capture and government fraud are not committed by so-called ‘crony capitalists’. Government corruption is not crony capitalism, but SOCIALISM in the guise of capitalism: It is the covert, criminal, clandestine and shrouded redistribution of the ‘fruits of production’ unlawfully, also lately referred to as 'Corporatism' which should never be confused with Capitalism or a genuine Freemarket* driven economy.
*'Freemarket': This does not mean the freedom to steal or cheat in the market, but to produce goods and services freely in a competitive economic environment without undue interference from government except for (legitimate!) safety and security reasons. This is critically important, as government does not produce jobs; the market does, and the freer the market the more the jobs that will be created.
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