S. Africa: Labor Statement, 5/7/'96

South Africa: Labor Statement (Excerpts,1)
Date Distributed (ymd): 960507

As the timetable for approval of South Africa's constitution enters its final day, among the few disputed items is a provision for employer lock-outs during strikes, which last week provoked the largest strike since installation of the post-apartheid government in 1994. Whether this issue is resolved in a last-minute compromise or moves to a referendum, the dispute is an indicator of a continuing debate about economic policy in South Africa, which is likely to intensify this year.

Labor, government, business and civil society are all represented in a discussion forum called NEDLAC (National Economic Development and Labor Council), one of the arenas in which the debate will be focused. While the government and civil society have not yet presented full framework documents, the South Africa Foundation has issued "Growth for All" representing business viewpoints, and the three major trade union federations have issued their framework statement.

The labour statement is available on-line, in html and plain- text versions at http://www.anc.org.za:80/cosatu/docs/jobs.html and gopher://gopher.anc.org.za:70/00/cosatu/docs/equity.txt

Brief excerpts from the 95K document are presented below. Further and updated information is available at the ANC Web Site (http://www.anc.org.za/) and at other South African sites, including the new South Africa search engine and catalog at http://www.ananzi.co.za/ and the Weekly Mail & Guardian at http://www.mg.co.za/.

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Social Equity and job creation, the key to a stable future 1 April 1996 -- Released by Cosatu, Nactu and Fedsal.

Labour's proposals on growth, development and job creation -----------------------------------------------------------
Introduction

Two years after the 1994 elections, South Africa remains a society characterised by vast inequalities, in wealth, economic power and incomes.

Much progress has been made to build a common nationhood, to normalise political processes and to create a culture of freedom. We now face the challenge of addressing the glaring inequities in our country.

In the process, some hard choices need to be made. As the white population had to give up its monopoly of political power in order to usher in the new democracy, so the economic elite should now be challenged to share the wealth and resources of our country to the benefit of all.

This critical requirement for the new democracy - the active promotion of social equity - is the key objective organised labour sets for itself during 1996. We do this because too many South Africans are poor, underpaid or unemployed, homeless and with their basic needs and requirements not satisfied by the economy. ...

Labour puts forward this framework as a first contribution to the current debate ...

A very unequal society

According to the HSRC, the poorest 40% of households in South Africa earn less than 6% of total income, while the richest 10% earn more than half the total income. While africans make up 76% of the population, the african share of income amounts to only 29% of total income. Whites, who make up less than 13% of the population, take away 58.5% of total income. (Source: HSRC. A Profile of Poverty, Inequality and Human Development in South Africa. 1995).

... South Africa has, in the words of the recent study on Key Indicators of Poverty in South Africa, "among the highest income inequality in the world." ... The poorest 53% of the population account for less than 10% of total consumption in our country, while the richest 6% of the population account for over 40% of consumption.

Of the poorest part of the population, a third live in shacks or 'traditional dwellings'. Of the poorest 53% of the population, about 80% have no access to electricity, about 70% have no access to piped water to their premises, and more than 80% no access to modern sanitation.

Inequalities in education and health care are as striking. Every indicator, from attendance at university, to the incidence of TB or stunting rates among children, tell the same story : the wealthy have a great quality of life, and our community pays the price for their lifestyle. ... "For those who become parents, the maternal mortality rate is 70 times higher among Africans than among whites. The cumulative effect of such inequity carries through life. Per capita, whites earn 9.5 times the income of blacks and live, on average, 11.5 years longer. In sum, South Africa exhibits that most bitter of social outcomes: destitution amid plenty." (Source: Reducing Poverty in South Africa, The World Bank, June 1994.)

These inequalities are not accidental: they are the natural outcome of the low wage policies, followed by the private sector, and the deliberate policies of the old state to under-spend on social services for black people. ...

Powerful conglomerates

Our country has a very high concentration of ownership and control by a few large corporations. ... The concentration of economic power has been helped by the weak competition policies followed in the past, and the use of pyramid companies to grant control to holding companies far in excess of the actual equity invested. ...

The current holders of economic power have acquired their wealth over the last few hundred years through land dispossession, the conquest of black people and the exploitation of black workers. ...

In more recent times, business has engaged in speculative activities, which have served to foster unproductive economic activities, and instead of investment in plant, equipment and people, it has invested in shopping malls, and huge glass and concrete towers as monuments to the sterility of the corporate and financial sector. This must change now.

Economic growth and development

The debate about growth is important, for with the wrong policies, we may achieve either no growth, or growth which benefits shareholders, but offers no equity to workers and the unemployed.

The relationship between growth and equity is complex. It is certainly not true that increased growth leads automatically to increased equity. Indeed, the experience of the Reagan-Thatcher years has shown that growth in those societies came at the expense of the poor.

The U.S. has developed into a society where greater numbers of people have insecure tenure of employment, working in the casual, part time and low wage sectors, and where the success of a company is now measured by the numbers of people it is prepared to retrench. ...

Social equity programmes may enhance growth in a number of ways. Investment in public infrastructure can significantly reduce production costs (as studies show was the case for Germany, Japan, Mexico, Sweden, the UK and the United States). The World Development Report of 1994, published by the World Bank, concedes that "many studies ... have concluded that the role of infrastructure in growth is substantial, significant, and frequently greater than that of investment in other forms of capital."

Land reform policies have played a major role in stimulating economic growth in many countries. In China, land reform has allowed for new surpluses to be generated in agriculture. This has been complemented with a "minimum package" of transport, telecommunications and power at village level, which led to a massive expansion in the productivity and performance of rural enterprises.

Wage policies which sought to increase earnings of workers, combined with programmes to increase contractual savings, have been used in Singapore as a key means of generating domestic savings to finance the expansion of economic activity.

Investment in health can contribute to raising the overall productivity and output of the economy. The World Bank itself reported a 9% rise in national output in Sri Lanka through the programme to eradicate malaria in that country.

In our country, the Key Indicators of Poverty in South African Study (produced by Saldru and published by the RDP office), draws attention to this relationship. Not only are the intense levels of poverty highly inequitable, they also constitute a brake to improving economic performance. The study records:

"The rural african poor, who make up the vast majority of the poor, face a number of specific barriers that prevent them from increasing their economic productivity. On average, these households spend more than three hours a day fetching water. ..."

The World Bank study on Reducing Poverty in South Africa argues "Redirecting public expenditure on urban infrastructure and services towards the black community would have an immediate and rapid impact on poverty and inequity. Such a strategy would also contribute to economic growth. In the short run, an intensive programme of broadening access to basic services will directly create employment opportunities. Over a longer horizon, a network of urban services and infrastructure would improve the workings of the urban economy by facilitating ready communication among firms and people." ...

Growth can in turn enhance social equity. It can do this in South Africa when it is labour-absorbing growth ... Recent economic growth, following the trend in certain liberalised markets elsewhere in the world, has been jobless growth. During 1995 for example, while the GDP grew by 3.5%, much of this was jobless growth. ... only 55,000 new jobs were created in the formal non-agricultural sectors during the last year. This is substantially below the number of new entrants to the labour market, and means therefore that, notwithstanding the growth performance, unemployment increased both absolutely and proportionately. So, for organised labour, as indeed for the majority of people in our country, it is not growth per se which is the measure of the economy's success - it is growth which fosters job creation which is critical. ...

Growth is fostered by investment, training and technological innovation.

These key engines of growth both contribute to, and are encouraged by, rising productivity. An important part of stimulating sustainable growth is to improve productivity and efficiency in the workplace. This includes labour productivity but is by no means confined to it. ... It is regrettable however that the debate on growth has been used by sections of the business community to launch a systematic attack on organised workers and on social equity, as if the goal of economic growth is not precisely to foster social equity.

The role of the state in the promotion of economic growth needs to be addressed. One perspective asserts, without any evidence, that the best role for the state is no role at all (other than combatting crime and keeping macro-economic balances). The other perspective, put forward by the trade union movement, draws on the experiences elsewhere which demonstrate the economic value of particular types of state intervention in the economy.

Japan, Korea and Taiwan intervened strongly and systematically in markets with industrial, trade and financial sector policies, to advance economic expansion, productivity, growth and export performance. Even Singapore, Malaysia, Thailand and Indonesia previously used, and China today uses, active industrial policy measures by the state to influence the pattern and rate of economic activities. With such widespread evidence, it is surprising that Anglo-Saxon economic orthodoxy still seeks to limit, rather than enhance, the role of the state.

Organised labour does not argue for the wholesale copying of these countries - indeed, their record on worker rights and human rights, have generally been poor. Many of these countries have lacked democratic institutions of governance, and multi-party democracy. Yet, when they are cited with approval by local businessmen, their interventionist policies in the economic arena are not mentioned. Their labour policies however are strongly supported by such commentators.

Market deregulation, or the 'rule of the free market' is often put forward as the main engine to develop the society. In theory, the immediate freeing of markets would allow capital, labour and other resources to flow to the areas where they can most productively be used. In practice it is not so clear, nor so simple. Societies which have deregulated their markets have not necessarily grown fast.

Many market failures - particularly the failure to allocate resources to education and training, or to investment in infrastructure and big capital projects - have led to poorly performing economies. The premature and unco-ordinated removal of tariffs, without attempts to address structural weaknesses of local industry, has wiped out employment. The failure to have financial market regulation has led in some countries to the collapse of major financial institutions, and of public confidence in the financial system. The system itself has often been inadequate in allocating capital to new economic activity. ...

Markets have been inadequate in responding to the social needs of human beings - in setting decent wages and fair standards, in protecting the poor and the marginalised, in correcting imbalances of wealth and inequality and in addressing the problems of exploitation. ...

The alternative is a coherent development plan, based on market realities, and seeking to marshall resources towards the building of an efficient, dynamic economy.

All governments intervene in economic decision-making. Some do so through the blunter tools of fiscal and monetary policy only. Others have active industrial policies which create a strong support environment for companies to do business in, and thrive. Such policies address the flow of investment, the capacity of production and the availability of people and capital... through a system of incentives and requirements.

South Africa needs a set of active policies, which builds a partnership for growth between the public and the private sector.

We put forward the alternative economic vision set out in this document as a challenge to an economy, which, whilst under the stewardship of big business, has failed our society.

A sterile business response

It is telling that the business community represented by the SA Foundation has launched a well-financed and well publicised campaign to cling onto their wealth. They do so by creating a range of red-herrings, such as the alleged "inflexible" labour markets and the alleged "labour elite". In so doing, they seek to let poor people pay for growth and development, whilst keeping the wealth and power of the privileged intact.

Their policy prescriptions consist of a restatement (with graphs and graphics) of ideologically driven 'solutions'. Behind the gloss lies the oft-repeated programme of economic deregulation, lower tariffs, privatisation, weaker trade unions, lower corporate taxes, reduced labour standards and financial market liberalisation. This has become known as the "neo-liberal" programme. It is a programme which has been advanced by the International Monetary Fund and the World Bank, and by international capital. South African business has merely repeated the stale and simplistic formulae underpinning this programme.

It is a programme to cut back the capacity of a democratic state to moderate the use of market power. It fails to acknowledge the real weaknesses in the economy, and the potential benefits in an active public sector fostering policies to promote growth.

It is a programme to weaken the trade unions, one of the important institutions in society which seek to advance social justice.

It is a programme which will divide society, strengthen the wealthy and reduce the prospects of negotiated agreements on the key challenges facing society.

In the process, big business seeks to repudiate key elements of agreements reached by their representatives with labour and government, on centralised bargaining (at the National Economic Forum in 1993) and on the Labour Relations Act (at Nedlac in 1995). ...

The unemployed and business

The cynical attempt by business to blame workers for high levels of unemployment needs to be challenged.

* First, it is the business community (not trade unions or workers) which retrenches thousands of workers each year. They do this simply in the chase for higher profits. Many companies continue to retrench ('downsizing and rightsizing', they call it), even when making above average profits. Yet these same companies now blame workers for unemployment!

* Second, the uncompetitiveness of sections of the economy is precisely due to the low levels of investment by business in education and training of the majority of workers. The partial exception to this has been the resources put into training of white artisans and professionals, by the business community, and the public sector in the past.

Successive editions of the World Competitiveness Report have placed South Africa at the bottom of the league of nations in human resource development. In the in-company training category, we are nearly at the bottom, ranked 40th in a list of 48 countries. In contrast, in areas such as infrastructure, finance and science and technology, the Report rates us as a mid-ranking country.

* Third, the cosy cartel of conglomerates which dominate the South African economy, have engaged in collusive and price-fixing practices which have blunted the ordinary competitive pressures in a market economy. The entry of foreign firms to the South African market has so often exposed the weaknesses, indeed the managerial incompetence of these large companies. ...

* Fourth, it is the employed workers which provide the social security net for the unemployed. ... Given the absence of a publicly-funded welfare net in South Africa, workers provide accommodation, food and other help to unemployed family members. In addition, employed workers, not the owners of capital, buy from the informal sector in the townships, use the taxis and support spaza shops. The wages of the employed workforce therefore sustains the informal sector and the unemployed.

In practice, Jabu Xulu who works in a metal factory, is the sole breadwinner, in a family which includes Cynthia Xulu, an ex-clothing worker recently retrenched. Cynthia's brother, Jonas Gumede, lives with them - he has been unable to find work since he left school. Their neighbour, Sipho Loro, sells meat at the taxi-rank, and Jabu buys from him once a week.

* Fifth, wages of many employed unionised workers are extremely low. ...

Even the study by Saldru into poverty concedes that 44% of those covered by their definition of the poor (the poorest 53% of the population) are wage earners (regular and casual wages). In addition, 19% of the income of the poorest 53% of the population is derived from remittances, principally from earnings of migrant workers sent to dependents. (Source: Key indicators of Poverty in South Africa, RDP Office).

This means therefore that up to 63% of the income of the poorest 53% of the population are from regular and casual wages, and from the earnings of migrant and commuter workers. So, on any definition of the poor, the earnings of workers form the bulk of income of our country's poorest people. Yet now business seeks to cut this income. ...

(continued in part 2)

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We now propose six pillars to promote social equity, based on South African realities. These are: a programme of job creation, a redistributive fiscal policy, proposals to break up economic concentration, measures to promote worker rights, a plan to build industrial democracy, steps to promote equity and economic development globally. ...

1. The first pillar is job creation. We propose eleven measures to create jobs in South Africa.

1.1 Start public works and mass housing programmes The Reconstruction and Development Programme which the ANC put to the electorate before the 1994 elections, calls for a co-ordinated public works programme in order to create jobs. Sections of the business community opposed this. The electorate backed the programme. Since the election, we have seen little evidence of a substantial public works programme on the scale we envisaged. The old bureaucracy which we inherited, comfortable with their job guarantees, have not been prepared, with energy and professionalism, to tackle the job at hand.

The attempt to involve the private sector in the provision of housing has not been successful. Indeed, only 34,000 units have been built by the private sector over the last 18 months, while the housing shortage is more than 2 million units. (Source: Business Day, 25.03.96).

Other societies devastated by war, or economic depression, have used public works and related programmes as a short term measure to bring the unemployed into employment. This has been done in the United States, Europe and Japan, with great success. ...

We propose that at least 300,000 such housing units be built every year over the next three years. ... In short, 350,000 to 550,000 jobs can be created over a three year period through implementing such a policy. The cost of such a programme would be about R30 billion over a three year period, at current prices. It can yield a continuous stream of income from occupants to help pay for the cost of construction. ...

We propose an accelerated programme of public works in the provision of electricity, piped water supply, sanitation, child care facilities and health care clinics to black areas. Programmes to provide roads and major dam and canal works, and to address telecommunication inadequacies, should be put into place. ...

We propose the public works programme be financed from government, business and labour, in the following manner: first, through a major contribution from the fiscus (the government sector), second, a three year levy of 5% on the pre-tax profit of businesses (the business sector), and third, the introduction of a prescribed investment requirement on pension and provident funds, the life assurance industry and the assets of the Public Investment Commissioners, to invest 5% of funds in special government bonds to finance RDP projects (workers and policy-holders). ...

1.2 Modernise our industrial base A major means to foster job creation is through the modernisation of our industrial base. ... We propose the retention and expansion of fiscal measures to encourage reinvestment of corporate profits, instead of the paying out of dividends. ...

1.4 Don't export our jobs We are opposed to trade related policies which destroy local jobs. The trade union movement accepts the need to open our economy, but we require a process that is carefully managed and sequenced in order to avoid job losses.

First, we need a series of active industrial policy measures to improve efficiencies and the performance of companies. Then, we need a pragmatic programme which lowers tariffs carefully, and not faster than required under the terms of the General Agreement on Tariffs and Trade. Simultaneously - not afterwards - we need to put into place a set of social adjustment programmes which will absorb, retrain and then place into new jobs, those workers who are displaced by restructuring. ...

It is instructive that the east Asian economies, often cited in support of a range of economic policy proposals in South Africa, were not big bang trade liberalisers. The World Bank study into the eight high-performing east Asian economies, confirms this reading. ...

We propose a reorientation of export incentives away from the current cash subsidy system under the Generalised Export Incentive Scheme (Geis). Instead, it should be replaced by the tripartite National Restructuring Fund, which assists companies to address the fundamental problems of uncompetitiveness in areas of education, technology upgrades and work organisation.

1.5 Expand domestic demand and promote local purchasing policies ... The domestic market must remain an important focus for the output of our goods - it constitutes a major market, where local producers have closeness to location and all the advantages of quick delivery. ... The domestic market is also a major platform from which to launch a successful export effort. ...

We propose policies which will expand the income of workers, hence stimulating domestic demand. The way to avoid such policies leading only to inflationary pressures, is to substantially increase efficiency of production. This should be done through decreasing the layers of managers in companies, decreasing the income of top management and introducing other productivity enhancing measures. ...

1.6 Train and develop the workforce International experience shows unambiguously the importance of a well-trained workforce to high growth economies. The development of a country's human resource is a sustainable advantage in the search for new markets. It offers real equity benefits to workers, through increased pay for increased skills. It leads to increased productivity. ...

We propose the introduction of a levy on companies of 4% of payroll, to be used to finance the retraining of workers, with supporting grants from government. This levy should be introduced initially for all firms with a turnover of at least half a million rands a year. ...

1.7 Increase productivity Over the last ten years, labour productivity in South Africa has risen by more than 15%. ... Notwithstanding this performance, however, it is vital that levels of productivity in the South African economy are improved. This will allow for some of the policies advanced elsewhere in this document, to be managed in a non-inflationary manner. ...

In our view, the combination of poor training of blue collar workers, with the effects of the recession on capacity utilisation, the lack of world class technology and work planning systems and an incompetent managerial layer grown fat in the apartheid years, are all important contributors to the productivity problem. ...

We propose a national productivity and equity framework agreement to be negotiated through Nedlac, to cover all industries, which should be put into place before October 1996. ... The agreement should cover the goals of improving managerial, labour, capital and raw material usage productivity levels. It should cover equity issues such as the distribution of productivity benefits, and the reorganisation of relations on the shop floor. It should deal with job creation and job security. This framework agreement could then be used as a basis, in industry-level negotiations, to address concrete targets of productivity improvement. ...

1.8 Create jobs in labour-intensive processes There is a vital role for the state in leading productive investment, through the policies of the parastatals and the public sector. ...

The Industrial Development Corporation (IDC) should be required to shift from its fixation with capital-intensive mega-projects, and use its resources to invest in labour intensive processes in industry. Job creation should be the primary mandate of the IDC over the next 36 months. Other goals, such as earning foreign exchange, should be carried out through promoting investment in labour absorbing activities with real export potential. ...

1.9 Stop retrenchments now A major cause of unemployment is the constant retrenchment by businesses of workers. Even profitable companies engage in periodic frenzies of retrenchment and 'downsizing'. This is not only jobless growth, it is "jobloss growth". This has occurred because it costs very little to retrench, and retrenchment avoids the real challenge of entrepreneurship: that is, growing a company out of economic problems rather than shrinking it down to the most profitable sections of the business. ...

The public sector too has contributed substantially to the crisis of unemployment. Staff reductions and natural attrition/early retirement programmes have cut the size of the public sector and parastatals dramatically. ... Restructuring of the public sector should be driven by, among others, the following principles: * those responsible for line function delivery (eg health care, teaching and social welfare) should be productively deployed, not retrenched; ... * the beneficiaries of preferential employment by the old government, particularly its bureaucracy, should have their positions and protections reviewed; * no retrenchments should be effected in areas of high unemployment, and major backlogs in public services; ...

1.10 Redistribute land to the poor There are real opportunities in South Africa for a major programme of land reform, combined with the promotion of small scale farming among black people, which can promote economic activity and employment very substantially. ... In fact the World Bank has calculated that 2 million full time jobs would be created in agriculture and related activities, through a programme of land reform in South Africa. (Source: Reducing Poverty in South Africa, 1994). ...

1.11 Stimulate economic activity ... The current very restrictive monetary policies followed by the Reserve Bank need to be moderated, in order to stimulate economic activity. With real interest rates at 12%, the cost of borrowing for investment for many businesses is prohibitive. ...

2. The second pillar is redistributive fiscal policies

We propose two measures to ensure a more equitable fiscal policy.
* first, redirect spending towards social services for the poor.
* second, increase the redistribution features of tax policy.

In the 1995/6 fiscal year, it was reported in the Budget that almost R7 billion of RDP related monies were lying unused in government bank accounts. The Department of State Expenditure has subsequently said that the true figure is closer to R10 billion. These monies, allocated previously for services and infrastructure for the poor, were not utilised because of problems in the delivery mechanisms in the private and public sectors.

In the private sector, the much vaunted 'partnership' with the state on provision of housing, has been a failure. The private sector should not be allowed to escape its commitments to redirect investment towards the poor. ...

In the public sector, sections of the old bureaucracy have not used the reconciliatory policies to energise itself, and use the instrument of the state to deliver to our people. Instead, its tardiness has contributed to a snail's pace of delivery. This must change ...

Wealthy South Africans are using the policies of nation-building and reconciliation to clamour for their privileges to be left untouched. They fail to see that the stability of the new democracy cannot be built on squeezing the poor.

There is one important source of income to assist in creating greater equity in society, and that is to tax the wealthy. Indeed, modern fiscal policy has developed precisely to achieve this aim.

Taxation is one of the many areas where hypocrisy is rife - special pleading by the wealthy are dressed up as arguments to attract foreign investment, decrease the 'undue tax burden', widen the tax base, simplify the administration of tax collection or encourage savings and discourage consumption.

2.1 Finance housing and health care for all ...

2.2 Increase corporate taxation The last few years has seen a shift away from corporate taxes. ... Company taxes yielded half of total government tax income in 1970. Twenty years later, it had been reduced to a quarter of revenues. By 1995, the corporate sector was contributing only 14% of tax revenue. ...

2.3 Reduce consumer tax on basic requirements VAT is a regressive tax. Unemployed people and the very poor pay it. Workers spend a large portion of their income on items subject to this tax. ...

Labour proposes that no VAT be payable on all basic foods, medicines, water, domestic electricity and education. Both these measures will offer effective, easily-administered relief to the unemployed and to low and middle-income earners.

2.4 Introduce a tax category for the super rich Currently, the top marginal tax rate, at 45%, is introduced on earnings above R100,000. This penalises the middle-income earners, and treats the truly wealthy very leniently. ... We now propose the introduction of a 55% tax rate on annual incomes from R200,000. ...

2.8 The debt, the deficit and equity ... South Africa's debt to GDP ratio is 55.6%. The average for the key OECD countries, that is societies not undergoing a Reconstruction and Development Programme, is 72%. [e.g. U.S. 63%, Canada 97%, Netherlands 78%] ...

Yet, South African business has been repeating with regularity the need for cutting the public debt and for reducing the deficit sharply, irrespective of its impact on overall economic performance. Reducing the deficit too quickly would cause deflationary pressure on the economy, and would slow down economic growth and job creation. Low economic growth in turn would discourage investment. Therefore, the deficit reduction process needs to be carefully managed, and be situated within the context of a range of other economic tools and objectives of government. ...

3. The third pillar is breaking the stranglehold of big business in the economy

The high levels of economic concentration in South Africa have major negative consequences on social equity. The big conglomerates own banking, mining, industrial and retail businesses. The concentration of power in a few hands limits the prospect of inclusive economic decision-making. ...

In addition, there is a wealth of international experience to the effect that the existence of such large and powerful conglomerates limits economic performance.

We propose that a new anti-trust policy be negotiated, which will address these problems. Current efforts by conglomerates to 'unbundle' are no more than corporate camouflage, which retains power and control in the small group of shareholders and their directors. ...

4. The fourth pillar is through improving worker rights

We propose four broad measures to improve the incomes and quality of life for workers: * first, strengthen worker rights through labour market measures, including the development of centralised bargaining; * second, invest in training and human resource development; * third, use public procurement policies to advance worker rights; * fourth, reduce wage differentials between managerial and 'blue collar' workers. ...

4.7 End the apartheid wage gap A major source of inequity in the society is the huge differentials in earnings between workers and management. These differentials are based on the apartheid wage gap which existed between white and black. The gap remains one based largely on colour.

The high wages at the top consume the resources of companies and hence increase the cost of production. They feed industrial tension and conflict on the shop floor. They reduce the prospects of a shared commitment to improving company performance. They divide the workforce into two totally different worlds, based on income. They are substantially out of line with equitable international practice. ...

We propose that the top 58 companies publicly agree to release information on the pay of their individual executive directors, particularly their CEO's. ... We propose further that the top 58 companies commit themselves to reducing the wage gap (including all fringe benefits and options) in the companies to no more than 1:8. This means that the earnings of the highest paid person should not be more than eight times that of the lowest paid person. ...

5. The fifth pillar is greater industrial democracy

We propose four broad measures to ensure this: * first, use workplace forums to strengthen shop steward structures * second, reduce managerial prerogative through legislation * third, grant workers 50% of the seats on company boards * fourth, address representation on mutual insurance companies immediately ...

6. The sixth pillar is championing economic development and worker rights internationally

We propose six broad measures to achieve this. * first, help the development of the Southern African region through technical and other assistance and aid to neighbouring countries; * second, assist the growth of trade unionism as an important instrument of social development in all Southern African countries; * third, campaign for a social clause to be part of all multilateral and bilateral trade agreements; * fourth, pursue the proposal that the WTO become a tripartite body, with representation by government, labour and business; * fifth, campaign for special market access to developed country markets for those developing countries with specified labour rights; * sixth, champion the call of Third World countries for a debt write off by international creditors. ...

6.1 Grow Southern Africa The Southern African region must be developed, through technical and financial assistance to neighbouring countries. We should find ways, while mindful of the employment imperatives in South Africa, to help grow the Southern African economy, to build its industry and expand its standards of living. A regional reconstruction and development plan for Southern Africa should be developed as a priority. We should now set up a regional summit, of governments and trade unions to consider how to give effect to this plan.

6.2 Support the regional unions ... "One element of regional policy, defended particularly in the call for a Southern African Social Charter by trade unions, is that minimum standards with regard to rights of workers to organise be established across the region as a whole. This will allow a process of greater integration to become one of levelling up rights and conditions of workers, rather than of levelling them down to the lowest prevailing standards". (RDP Base document, paragraph 4.9.6)

This policy requires a strong, well-resourced labour movement in the region. We propose a regional trade union solidarity fund, with R20 million a year made available by government for programmes by the labour movement in the region.

We propose further that the South African government initiates a process to negotiate a set of minimum standards to be established across the region as a whole. ...

From: "APIC" <apic@igc.apc.org> Date: Tue, 7 May 1996 18:56:49 -0500 Subject: S. Africa: Labor Statement, 1

Editor: aadinar@mail.sas.upenn.edu