The min­i­mum wage is a good start

It needs to be ac­com­pa­nied by a pol­icy that re­stores dig­nity, over­comes apartheid struc­tures and is linked to so­cial se­cu­rity, writes Bheki Nt­shal­intshali

The Star Late Edition - - INSIDE - Bheki Nt­shal­intshali is the gen­eral sec­re­tary of Cosatu

THE RE­CENTLY con­cluded Na­tional Min­i­mum Wage (NMW) agree­ment at Ned­lac rep­re­sents a par­tial vic­tory for the work­ers and also sig­ni­fies the first step to­wards the at­tain­ment of a liv­ing wage.

The NMW is a prod­uct of an ar­du­ous strug­gle for a liv­ing wage by work­ers and their fed­er­a­tion Cosatu, since the 1980s.

Sixty years ago the Free­dom Char­ter called for a NMW as one of its key de­mands. The Free­dom Char­ter stated that there shall be a 40-hour work­ing week, na­tional min­i­mum wage, paid an­nual leave and sick leave for all work­ers, and ma­ter­nity leave on full pay for all work­ing moth­ers.

Work­ers have man­aged to de­feat the fear­mon­ger­ing, un­truths and out­right pro­pa­ganda by a well-funded lobby group that did ev­ery­thing to mislead the peo­ple and black­mail the gov­ern­ment into aban­don­ing the idea of a min­i­mum wage.

This once again re­in­forces our per­spec­tive that un­less the work­ing class raises it­self to a hege­monic po­si­tion in key sites of power, and strength­ens its ca­pac­ity to mo­bilise and fight, the en­vis­aged eco­nomic trans­for­ma­tion will never hap­pen.

The strug­gle for a liv­ing wage is a long and dif­fi­cult one, which in­cludes the strug­gle for af­ford­able ba­sic ser­vices, trans­port and food, and de­cent wages and work­ing con­di­tions. It will be achieved through only the col­lec­tive power of work­ers.

The most re­cent de­vel­op­ments in the coun­try have re­in­forced the im­por­tance of a mean­ing­ful NMW. The re­cently re­leased Labour Mar­ket Dy­nam­ics, pub­lished by Sta­tis­tics SA, re­veal that 50% of work­ers earned be­low R3 100 in 2015.

It re­in­forces the find­ings of the Wits NMW Re­search Ini­tia­tive that more than 50% of full-time work­ers (or 5.5 mil­lion work­ers) earn wages that are too low to bring them and their de­pen­dants out of poverty.

This is what has mo­ti­vated the fed­er­a­tion to fight for the NMW, which needs to be pitched at a level where it is able to ad­dress this dis­grace of work­ing poverty, and the un­ac­cept­ably high lev­els of wage in­equal­ity.

While the fig­ure of R20 an hour falls short of the fed­er­a­tion’s pro­posed fig­ure of R4 500 a month and does not ad­dress the min­i­mum liv­ing stan­dards of an av­er­age house­hold, it of­fers work­ers a de­cent start­ing salary base.

This will give work­ers build­ing blocks to put to­gether a solid foun­da­tion to­wards a liv­ing wage and will have a ma­te­rial im­pact on im­prov­ing the wages of half the num­ber of work­ers, or 6 mil­lion of our bru­tally ex­ploited work­ers.

Many work­ers like farm­work­ers un­der the Food and Al­lied Work­ers Union, petrol at­ten­dants un­der the Na­tional Union of Me­tal­work­ers of South Africa, se­cu­rity guards un­der the South African Trans­port and Al­lied Work­ers Union, tex­tile work­ers un­der the South­ern African Cloth­ing and Tex­tile Work­ers’ Union, re­tail work­ers un­der the South African Com­mer­cial, Cater­ing and Al­lied Work­ers Union and other non-unionised vul­ner­a­ble work­ers will ben­e­fit im­mensely from this deal.

It is ob­vi­ous that a NMW is not a sil­ver bul­let by it­self. It needs to be com­bined with de­vel­op­men­tal labour mar­ket and eco­nomic poli­cies.

A mean­ing­ful NMW needs to be ac­com­pa­nied by a new wage pol­icy, which be­gins to recog­nise the dig­nity of every worker and over­comes the legacy of apartheid wage struc­tures. We also need to en­sure that it is linked to a plan to ex­tend com­pre­hen­sive so­cial se­cu­rity.

It is in­dis­putable that we in­her­ited a legacy of an apartheid wage struc­ture that was never ad­dressed and that our eco­nomic sys­tem is not fully trans­formed. The ANC 2014 Man­i­festo pro­posed com­pre­hen­sive col­lec­tive bar­gain­ing, state in­cen­tives, em­ploy­ment eq­uity and the NMW as a pack­age of mech­a­nisms to trans­form the wage struc­ture in or­der to pro­mote de­cent wages and de­cent work.

There have been some pes­simistic voices that have ar­gued that a leg­is­lated NMW will be bad for em­ploy­ers. But most stud­ies have shown that adopt­ing a min­i­mum wage and pay­ing work­ers bet­ter salaries in gen­eral makes busi­nesses op­er­ate more ef­fi­ciently and em­ploy­ees work harder than usual.

Higher and de­cent wages lead to more con­tent em­ploy­ees, who re­main with the busi­ness a lit­tle longer, and re­duce staff turnover and train­ing costs that go with hir­ing new em­ploy­ees.

Some have ve­he­mently ar­gued that a min­i­mum wage will cost the econ­omy jobs and raise un­em­ploy­ment lev­els. This is not sup­ported by any hard ev­i­dence.

In the US, a study by bank­ing gi­ant Gold­man Sachs of the 13 states which have raised their min­i­mum wage, found that “the states where the min­i­mum wage went up had faster em­ploy­ment growth than the states where the min­i­mum wage re­mained at its 2013 level”.

De­tailed re­search has been done by pro­gres­sive re­searchers on the prospects for a NMW in South Africa. Labour in al­liance with the com­mu­nity has placed de­tailed pro­pos­als on the ta­ble based on ex­ten­sive anal­y­sis of the in­ter­na­tional ex­pe­ri­ence, as well as de­tailed con­sid­er­a­tion of the South African wage struc­ture and the con­di­tions fac­ing work­ers.

Cosatu is proud of the work done by labour, com­mu­ni­ties and other pro­gres­sive NGOs to move the gov­ern­ment and big busi­ness away from the ridicu­lously low level of R1 258 a month that they had pre­vi­ously pro­posed.

Cred­i­ble in­sti­tu­tions like Wits Uni­ver­sity have pro­duced re­search that dis­proves the pro­pa­ganda that the in­tro­duc­tion of a R3 500 min­i­mum wage will have ma­jor neg­a­tive ef­fects on the econ­omy.

The idea be­hind the min­i­mum wage is that it should make an ef­fec­tive con­tri­bu­tion to a wage pol­icy, which tack­les the ob­scene lev­els of in­equal­ity preva­lent in our wage struc­ture.

Labour will en­sure that the min­i­mum wage will af­ford all work­ers a ba­sic level of dig­nity and in its de­sign and leg­isla­tive for­mu­la­tion, we shall en­sure that it sup­ports and re­in­forces col­lec­tive bar­gain­ing.

The huge task is to en­sure that it coun­ters po­ten­tial abuse by em­ploy­ers, and leg­is­late against the down­ward vari­a­tion of ex­ist­ing agree­ments, which are higher than the NMW.

Cosatu is adamant that the NMW should be used as a spring­board for a liv­ing wage cam­paign in all sec­tors.

The In­ter­na­tional Labour Or­gan­i­sa­tion is clear that the ob­jec­tive of the min­i­mum wage is to re­duce poverty by es­tab­lish­ing a gen­er­ally ap­pli­ca­ble lower limit un­der which wages are not per­mit­ted to fall. The fix­ing of such a gen­eral min­i­mum wages is nor­mally as­so­ci­ated with the view that all work­ers, as a mat­ter of right, ought to re­ceive pro­tec­tion against un­ac­cept­ably low wages.

Cosatu will re­main vig­i­lant and shall con­tin­u­ously push to en­sure that this start­ing fig­ure is com­bined with a firmly agreed medium-term tar­get and that there are de­cent above-in­fla­tion an­nual in­creases to pro­gres­sively achieve this tar­get.

There has to be some com­pli­ance mech­a­nisms and ef­fec­tive sanc­tions in place to en­sure that this NMW ben­e­fits the work­ers, oth­er­wise it will be a mean­ing­less ex­er­cise.

PIC­TURE: NIC BOTHMA / EPA

LONG OVER­DUE: A woman wears a fake R200 note with the words “Na­tional Min­i­mum Wage” printed on it dur­ing a Cosatu protest out­side Par­lia­ment in Oc­to­ber 2015. The Na­tional Min­i­mum Wage is the prod­uct of an ar­du­ous strug­gle for a liv­ing wage by work­ers and its trade fed­er­a­tion since the 1980s, says the writer.

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