‘Social justice’ is killing jobs
The ‘one size fits all’ approach of collective wage bargaining is indefensible
UNEMPLOYMENT and poverty remain some of South Africa’s biggest threats, but our centralised collective bargaining model – with bargaining councils extending agreements to non-parties – is still the biggest deterrent to employment.
Beneficiaries of the bargaining council system – monopoly capital and trade unions – defend the system, suggesting that “reducing disproportionate income differentials” is one of collective bargaining’s purposes. However, this is wherein the weakness of the South African version of collective bargaining lies.
The cover-up for this economic delusion, is “social justice”. However, how can it be “social justice” when:
The Labour Relations Act expressly marginalises SMME’s voting power to preserve the selfish interests of big business, big trade unions and socialist policies?
An employer, whose cost of labour as a percentage of turnover is less than 5%, enforces a wage on an employer whose cost amounts to more than 50%?
A small employer in a rural area, with different economic realities that drastically differ from that of a big business in an economic hub, is judged by the same economic and operational measures?
The system strengthens monopolies at the cost of entrepreneurship and SMMEs – the main drivers in addressing unemployment and poverty?
It has already caused the complete demise of certain industries and is rapidly contributing to the demise of others?
It denies a work seeker the right to work for a wage he finds acceptable, allowing him to escape the clutches of unemployment, poverty and humiliation?
It dictates that, unless a business can afford to pay a specified amount for certain work done, that particular job may just as well be exported?
The system denies the honest reality that employers, without exception, only pay wages they can afford which will not affect the long-term sustainability of the business. and which fit into market realities?
That any arrangement which expects them to operate outside these parameters will discourage employment? This approach defies all logic. How is it possible that in a country where unemployment and poverty pose a serious threatsto peace and stability, even more so when the ability to pay social grants will inevitably come under pressure, people are denied the right, without external interference, to agree on a wage?
How can this go unchallenged? One cannot be overly surprised when a socialist-orientated government and short-sighted socialist trade unions drive the system which is their lifeline.
Monopoly capitalists sustain the system: it affords them the advantage to pass the impact of weak wage deals on to SMMEs, which have to absorb the devastating effect of these poor policies, thus eliminating competition, all perpetrated under the guise of social justice.
Of most concern, is the blatant dishonesty of employers who defend the system. They agree the “one size fits all” approach has caused immeasurable hardship and warrants drastic change. But they buckle under perceived pressure. They even publicly defend a system which they, behind closed doors admit is indefensible.
Weak, dishonest and self-serving monopoly capitalists remain a prominent threat to South Africa’s well-being. It will eventually catch up with everybody; maybe it already has.
Papenfus is chief executive of the National Employers’ Association of SA.