Ramaphosa must confront the labour unions this year

Phumlani Majozi says that to a very large extent our labour market is rigged in favour of organised labour

South Africa’s labour unions have gone wild over the past years and President Cyril Ramaphosa must confront them on their constant excessive demands. The unions have stalled economic reforms. They have swayed public policies in their favor. They wield too much power in the country – and their opposition to sound economic reform has contributed to the economic sluggishness this country endures.

Now it’s very important that I’m not misunderstood. I do not want any misunderstanding on my position regarding the role of labour unions in our society.

I’m a passionate advocate and believer in freedom of association. So, I’m not at all opposed to the existence of labour unions in South Africa and indeed anywhere around the world. People have the right to organize and form organizations whatever the intent may be so long as the intent is not violence or the spread of hate.

Labour unions have played a significant and indispensable role in shaping South Africa’s history. They mobilized to push back against apartheid during the 1980s. Our current President, Cyril Ramaphosa, was a participant in that anti-apartheid mobilization. He was a unionist before he came into politics through the ANC.

I cannot, however, refrain from pointing out the serious problems brought by the current African National Congress (ANC) government’s alliance with labour unions. This alliance harms the potential for market-oriented economic reform in South Africa.

Every South African should understand how unions function, especially the role they play in our democracy.

Often, unions claim to be representing those who are disadvantaged. This can sometimes be untrue and misleading. Unions often only represent the interests of their members. The reason they project themselves as representing the disadvantaged is to draw public support for their cause.

This is why I’m always bewildered when people are quick to side with unions on labor market issues. Unemployed people are almost always affected by the selfish actions of unions in the labour market.

To a very large extent, the labour market remains rigged in favor of unions. The National Minimum Wage Act, which was introduced in January 2019, and the Labour Relations Act are among the laws that favor unions. When unions support all kinds of regulations and pressure the ANC to craft policy in the unions’ favor, it sometimes hurts job opportunities for the unemployed.

It’s painfully clear that the government bows to pressures from unions. In June 2020, President Cyril Ramaphosa shut down schools out of fears that COVID-19 could fuel infection rates in schools.

Ramaphosa’s decision was reckless, and it seemed to be more motivated by politics than science. Numerous studies around the world, including the recent one by Sharif Ismail published in Lancet, have suggested that schools are at lower risk of the COVID-19 spread. Yet teachers’ unions vehemently opposed the opening of schools, arguing their members would contract the disease. People questioned whether the president listened to unions or scientists.

But because of the influence unions have on the ANC, the party will not adopt and implement the needed economic reforms to reboot the economy. The party is beholden to unions.

For example, Ramaphosa’s administration has proposed that Eskom be unbundled into three separate entities, which are generation, transmission, and distribution. Unions oppose this proposal because they believe it will lead to the privatization of the power utility and potential job losses for their members.

Eskom has been identified as one of the biggest risks to South Africa’s economy – as the company cannot meet electricity demand. South Africa endures power outages on a regular basis – which has been damaging to business and the economy.

A three-year wage-increase agreement between the government and unions was signed in 2018. Due to the dire financial situation exacerbated by the COVID-19, the government sunk further into financial difficulties and the economy crashed. The government is now reneging on the agreement and did not affect the wage increases in April 2020. In response, unions are fighting this and have threatened not to vote for the ANC in this year’s local elections.

These selfish unions make these demands and threats on the back of massive job losses in 2020. Millions of South Africans are sitting at home without jobs. Yet unions have the audacity to demand salary increases and issue threats.

Cyril Ramaphosa and his cabinet need to confront the unions. They must do what is required regardless of what the unions say. It is a disgrace that three years into his presidency, Ramphosa still tolerates unions’ sometimes absurd demands.

Phumlani M. Majozi is a senior fellow at African Liberty. His website is phumlanimajozi.com Follow him on Twitter: @PhumlaniMMajozi