It’s crunch time for unions

CityPress - - Business - Terry Bell busi­ness@ city­press. co. za

We are head­ing into a rough year eco­nom­i­cally; that much seems to be agreed on by econ­o­mists and com­men­ta­tors across the board. So when unions start, later in the year, to de­mand dou­ble-digit pay rises, do not be sur­prised: they will be jus­ti­fied. As will farm work­ers in protest­ing about their 95c-an-hour in­crease, an­nounced this week.

And should the state of the na­tion ad­dress next week call for more belt-tight­en­ing, the unions will be jus­ti­fied in con­demn­ing aus­ter­ity mea­sures and call­ing for the “fat cats” to pay up.

How­ever, given the de­gree of in­fight­ing and ap­par­ent frag­men­ta­tion within a num­ber of Cosatu unions, along with bick­er­ing about ri­val fed­er­a­tions, the labour move­ment will prob­a­bly be weaker this year than at any time in the re­cent past.

But this will not halt ac­cu­sa­tions that it is “greedy” unions that are at least partly to blame for the eco­nomic cri­sis the coun­try faces. Yet such ac­cu­sa­tions fly in the face of re­al­ity and usu­ally rely on of­fi­cial sta­tis­tics, with­out look­ing be­neath the sur­face of the fig­ures.

This shal­low anal­y­sis means it is gen­er­ally ac­cepted that the cost of liv­ing in De­cem­ber in­creased by 5.9% and that wage rises should be pegged to this fig­ure, or to what­ever it is when pay is ne­go­ti­ated.

How­ever, the in­fla­tion rate (con­sumer price in­dex) is cal­cu­lated on the range of pur­chases made by house­holds that, on av­er­age, spend R12 500 a month. This is roughly three times more than the pay of nearly half of em­ployed South Africans.

A more ac­cu­rate cal­cu­la­tion of in­fla­tion for low­paid work­ers would be to as­sess the in­crease in the cost of essentials: food, trans­port, cloth­ing, shel­ter – let alone such items as school fees and med­i­cal pro­vi­sion.

In a coun­try with a prob­a­bly re­al­is­tic un­em­ploy­ment rate of about 40%, the num­ber of de­pen­dants ev­ery worker sup­ports also tends to be high. And all share the com­mon bur­den of the cost of liv­ing.

Such costs – es­pe­cially at the level of ba­sic food­stuff – have, in re­cent years, gen­er­ally ex­ceeded wage rises, mean­ing most work­ers have suf­fered re­duc­tions in the buy­ing power of their pay.

Over the past year, for ex­am­ple, a ba­sic bas­ket of gro­ceries, mea­sured for sev­eral years by this col­umn, has risen by more than 15%.

How­ever, sta­ples for most poor house­holds, such as cook­ing oil, mealiemeal and samp, have to­gether recorded a 40% in­crease.

The cost of even that di­etet­i­cally aw­ful stand-by of the poor – sugar and bread – has gone up by more than 10%.

And this is be­fore the full ef­fects of the col­lapse in the ex­change rate value of the rand and the drought have fed through to the rest of the econ­omy. For those on min­i­mum wages or fixed in­comes, let alone the army of the un­em­ployed, this is a fright­en­ing prospect.

And it is trade unions that have tra­di­tion­ally pro­vided a de­fence for this vul­ner­a­ble sec­tor of so­ci­ety. So the need for a united, in­de­pen­dent and demo­cratic labour move­ment with a clear fo­cus on a new eco­nomic model has per­haps never been more ur­gent.

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