Ox­fam re­port shows in­equal­ity greater than ever

The Star Early Edition - - FRONT PAGE - KHAYA KOKO

ATORRENT of dis­sent­ing views re­gard­ing a na­tional min­i­mum wage has been un­leashed fol­low­ing yes­ter­day’s re­lease of Ox­fam’s in­equal­ity re­port at its South African head­quar­ters in Braam­fontein, Joburg.

The NGO’s re­port, ti­tled “An Econ­omy for the 99 per­cent”, shows how the com­bined wealth of three men in South Africa is greater than the wealth of the bot­tom 50 per­cent of the coun­try com­bined; and ad­vo­cates for pro­gres­sive wage poli­cies which it says will bridge in­come and wage dis­par­i­ties.

Mean­while, the re­port claims the gap be­tween rich and poor is greater than had been feared, de­tail­ing how big busi­ness and the su­per-rich are fu­elling the in­equal­ity cri­sis by dodg­ing taxes, driv­ing down wages and us­ing their power to in­flu­ence pol­i­tics.

In South Africa, the rich­est 1 per­cent of South Africans have 42 per­cent of the to­tal wealth.

“Such in­equal­ity is the sign of a bro­ken econ­omy, from global to lo­cal, and the lack of will from the gov­ern­ment to change the sta­tus quo,” said Ox­fam SA ex­ec­u­tive di­rec­tor Sipho Mthathi.

“Gov­ern­ments, in­clud­ing the South African gov­ern­ment, can act to help ev­ery­one, not just those at the top. They can build an econ­omy where busi­nesses pay their taxes and con­trib­ute to the wider good, where ev­ery­one is able to be healthy and ed­u­cated and where poverty wages are a thing of the past,” Mthathi added.

The chief econ­o­mist at the SA In­sti­tute for Race Re­la­tions, Ian Cruick­shanks, ex­pressed sym­pa­thy that 42 per­cent of the coun­try’s wealth is con­cen­trated in the hands of the top 1 per­cent of earn­ers, adding that the gov­ern­ment needed to im­ple­ment its own poli­cies to help bridge the in­equal­ity di­vide.

“Pres­i­dent Ja­cob Zuma has been promis­ing to spend roughly R900 bil­lion on in­fra­struc­ture de­vel­op­ments in past State of the Na­tion ad­dresses, which he said would pro­pel eco­nomic growth and as­sist in al­le­vi­at­ing poverty and in­equal­ity. This has not hap­pened at the pace the gov­ern­ment said it would,” Cruick­shanks said.

Re­gard­ing the pro­posed na­tional min­i­mum wage, the re­port drew on re­search from Brazil un­der the lead­er­ship of the coun­try’s former pres­i­dent Luiz Iná­cio Lula da Silva, show­ing how “be­tween 2001 and 2012 real wages of the bot­tom 10 per­cent in­creased more than those of the top 10 per­cent thanks to pro­gres­sive min­i­mum wage poli­cies”.

Cruick­shanks said a na­tional min­i­mum wage would be detri­men­tal to the coun­try as it would lead busi­nesses to­wards mech­a­ni­sa­tion. This he said would drive jobs away for semi-skilled and low-skilled work­ers, which he said would lead to a greater bur­den on the state in terms of more so­cial grants and more so­cial demon­stra­tions be­cause of a lack of jobs.

Cosatu spokesper­son Sizwe Pamla said the labour fed­er­a­tion favoured a na­tional min­i­mum wage, which he said would help al­le­vi­ate “an apartheid-in­her­ited labour mar­ket sys­tem de­lib­er­ately de­signed to ex­ploit black peo­ple, and struc­tured to en­sure low wages for blacks”.

Pamla also ar­gued what he as­serted was an eco­nomic im­per­a­tive for a min­i­mum wage pol­icy, say­ing it would ad­dress the “dys­func­tional” as­pects of South Africa’s econ­omy where work­ers can­not af­ford the prod­ucts they pro­duce.

“If you have 60 per­cent of South African work­ers tak­ing home less than R5 000 a month, what is it that you are pro­duc­ing as an econ­omy that those work­ers can af­ford? A min­i­mum wage is good for the coun­try be­cause when you give peo­ple more money, they will be able to spend that money in the econ­omy,” said Pamla.

But Cosatu’s views were re­pu­di­ated by Leon Louw, ex­ec­u­tive di­rec­tor of the Free Mar­ket Foun­da­tion (FMF), who la­belled Cosatu “mean” and “cruel”, say­ing they were ad­vo­cat­ing for a min­i­mum wage at the ex­pense of un­em­ployed South Africans.

“If you have nearly 40 per­cent of South Africans who are un­em­ployed and des­per­ate – re­ly­ing on wel­fare, fam­ily, friends, crime, in­for­mal trade and so on – and you then pro­pose rais­ing the cost of em­ploy­ing peo­ple, I can­not be­lieve that a moral and eth­i­cal hu­man be­ing would want to do that. I find that ab­so­lutely as­tound­ing,” Louw em­pha­sised.

“The first thing in eco­nomics is that if you raise the price of some­thing – in­clud­ing labour costs – peo­ple will buy less.”

Louw also de­nounced Ox­fam, call­ing the or­gan­i­sa­tion “a giant scam, like a Ponzi scheme, that pa­rades as char­ity”, adding that Ox­fam’s “laud­able” work to al­le­vi­ate poverty had been “hi­jacked by this new pro­pa­ganda – what I call ‘pros­per­ity de­nial­ism’. They are deny­ing the fact that the world has achieved an as­tound­ing ex­plo­sion of pros­per­ity over the last gen­er­a­tion.”

Pamla said he was not sur­prised at the FMF’s op­po­si­tion to a min­i­mum wage, say­ing the FMF were lob­by­ists for big busi­ness and fight­ing its bat­tles. “All big busi­ness has to say is ‘we want labour costs to be cheap for us to max­imise prof­its’. And big busi­ness will un­leash the FMF on its be­half.”


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