Minimum wage negotiation had SA’s DNA written all over it, says Cyril

IT WAS on June 26, 1955, in an open field in Kliptown, near Joburg, that 2 284 delegates from every corner of South Africa began ratifying a document that would play a pivotal role in the political discussions and debates that would shape the country over the next six decades, and beyond.

Describing the Congress of the People and its Freedom Charter, the ANC president, Albert Luthuli wrote: “The charter produced at Kliptown is line by line the direct outcome of conditions which obtain harsh, oppressive and unjust conditions.

“It’s thus a practical and relevant document. It attempted to give a flesh and blood meaning in the South African setting to such words as democracy, freedom, liberty.”

After the defeat of apartheid the debate around the clauses in the charter began anew with progress being far too slow for many people. But there were beacons of light too…

Deputy President Cyril Ramaphosa is sitting at a table in the boardroom of the presidential offices of Tuynhuys in the precincts of Parliament.

He is there to speak about a triumph of toenadering, some would say far too rare these days, between representatives of government, business, labour and communities: agreement over a minimum wage of R3 500 a month.

Speaking with great passion, Ramaphosa says: “It was what I would call a milestone moment for the social partners who had been huddled together at the offices of Nedlac, negotiating this for a solid two years and a few months.

“When finally we reached agreement, everyone was overjoyed. It was an emotional moment. For some of us who have been involved in the Struggle for all these years, it meant a fulfilment of a demand set out by the drafters of the Freedom Charter. “We are doing it 62 years later. Late, but better late than never.” Ramaphosa describes the agreement as having put in place the “foundation stone of dealing with income inequality” and for dealing a “devastating blow against wage poverty”.

“It came as a big shock to us to be given real-time evidence of the state of wage poverty in our country.

“Everyone involved in the process expected farmworkers and domestic workers to be at the bottom of the rung. But few of us expected workers in the retail sector, in logistics, in distribution, in hairdressing salons to be earning as low as between R6 and R14 an hour.”

He points out that these workers are not only from obscure sectors of the economy. Some, he says, are from formalised sectors with wage determinations. “What this tells us is that there has been super exploitation of working people in our country.”

Ramaphosa believes the accord was strengthened because the government did not act unilaterally.

And business did not impose their own wages on working people. The agreement was jointly arrived at.

“It’s a most powerful consortium of social partners acting together to lift 6.6 million people out of wage poverty.” Ramaphosa stresses that the national minimum wage is not a living wage.

“A living wage should be higher. It should be based on a number of other considerations on what it takes for a family to sustain a living.

“What the minimum level should be. It’s based on nutrition. It’s based on a family being able to sustain a life.

“The national minimum wage is right at the bottom. But what it does is form a very good base for us to tackle income inequality. And the strength of this that it is not going to remain static. The wage is going to rise year after year.

“And it will rise on two accounts.

“It will be cost-of-living driven. And it will be based on a review that will take a number of factors into account, including our GDP growth, including our employment levels in the country, including interest rates, including our exchange rates and a whole range of other factors.”

We had to ask, are we prepared to countenance a haemorrhaging of jobs?

Ramaphosa says a wage commission, which will form part of this process, will give consideration to lifting the minimum wage.

“We expect that this minimum wage that we have struck is going to have an impact on reducing poverty.

“It is not the only factor, but it is one of those factors that will act to reduce poverty.”

Ramaphosa says that during discussions between the parties, a number of issues were raised. The most important one was: could the economy afford to pay a minimum wage? Would this not lead to massive unemployment?

“This came from the business side. But government was equally concerned. We have the responsibility of managing the economy of South Africa and the question we had to ask ourselves was: ‘Are we prepared to countenance a haemorrhaging of jobs?’

“The trade unions, on the other hand, wanted to move towards a living wage.

“They did not want a minimum wage that was going to be pegged at a low level.

“In the end, the level of the minimum wage is what kept the parties apart.

“For quite a long time, discussion around it was not very robust because people were just tap dancing around the level of the minimum wage.”

The other issue, Ramaphosa says, was that all three parties did not trust each other.

He says when business looked at the trade unions, they thought they just wanted a very high wage.

There was exactly the same thing on the opposite side. Nobody trusted the other.

“It was quite interesting how we finally won trust. We set up two structures. We set up a technical team that dealt with wage inequality.

“We set up another team that dealt with labour stability. And above them we set up what we called a committee of principals.

“These were the bigwigs in government, in business, in labour and in communities.

“This committee of principals was where you expected a more mature approach to things, a more sober, a more soft-toned exchange of views, no screaming, no shouting, where you articulated your viewpoint in a measured way.

“At a technical team level, representatives would go at each other hammer and tongs. They would scream at one another. These were the real foot soldiers. But it was these foot soldiers who helped to unlock the logjams.

“One thing that can be said about this negotiation was that it had South African DNA written all over it.

“It had a typical South African fingerprint,” Ramaphosa added.

Oakes is the Independent Media group political editor.