The dictum that transformation needs growth has been forgotten

Coenraad Bezuidenhout says that for the foreseeable future our labour regime will provide neither employers, nor poor workers or the unemployed with much joy

It's not about jobs or growth, it's about who is winning and who is losing out

Violent strikes are nothing new in South Africa. Last year we had Marikana, the agriculture strike in the Western Cape and the truck drivers' strike in October. 50 people died, all of them poor. In 2006 it was the security guards' strike during which 60 people died. Since 2000, more than 180 people died in violent strikes. While there has been blame in numerous directions, few sincere efforts to root out the causes stand out.

In any caring society, no potential causes would be disregarded. Yet despite the tragedy a year before, Parliament recently approved amendments to the Labour Relations Act that removed strike balloting requirements. This means despite having no voice, workers who do not want to strike may still face violent intimidation if they defy their union leaders.

The Employment Equity Amendment Bill, which received in principal approval two weeks ago, herald numerous changes business warns against. Businesses will no longer be able to appeal against government compliance orders, may be taken to court quicker and more regularly for non-compliance.

These punitive measures may be apt in times of transformationless growth, but the dictum that transformation needs growth appears to have been forgotten. Barely 40% of working age adults in South Africa are employed at all, yet government sees it fit to tighten the nooses around the neck of even temporary employment services.

How do we end up in this position? Who gains, who suffers and what will the consequences be?

Although few facts relating to the South African economy are indisputable, two should meet little controversy. Firstly, the economy is not growing fast enough or in the necessary manner to provide the kind of shared prosperity we need to sustain a peaceful future. Secondly, there is insufficient agreement and leadership on how to achieve that growth. The unemployed and poor therefor lose.

Our slow and skewed economic growth is a function of past policies, which has left a large part of the population vulnerable to economic exclusion and condemned to poverty. We have proven unable to overcome this, because the political and social dialogue institutions that need to promote an environment conducive to the economic growth, are failing us. It is worth running through how these malfunctions keep as back.

Many may have principle issues with the National Planning Commission (NPC) and the contents of its National Development Plan (NDP). However, the small chance that the latter will be successfully implemented may rather result of the former being institutionally ill-grounded and ignorant of the best lessons (Malaysia and Lula's Brazil) of how such structures should function.

The NPC failed to use social dialogue, Parliament and other consultative structures timeously to get agreement on the long-term goals. In practice, its main weak points are that it needs firm political air cover from the President, and firm commitment from social dialogue constituencies for its execution. It currently has neither.

The NPC was admittedly really more a tactical catch all for numerous political compromises, ranging from retaining Minister Trevor Manuel's credibility with the markets to defusing the push from the left for a tiered cabinet. Many positions in cabinet were subdivided or newly created to accommodate politics, rather than the pursuit of jobs and growth. These expansions are accompanied by a greater degree of internal competition in cabinet, which have contributed to government inertia on key economic issues. The politicians therefore won, but the jobless and the poor are losing out.

The social corporatist set-up that the National Economic Development and Labour Council (NEDLAC) and the bargaining councils signpost, may have been necessary as a transitionary measure, but it has outlived its usefulness. Our centralised labour regime fails to promote industrial peace or productivity. NEDLAC fosters division between business and government, as every policy discussion becomes a proxy battle for labour to gain more political influence. So we may talk growth and employment, but the real game is more about who carries more influence in the tripartite alliance, and the rules are few. So, labour leaders win influence and the growing numbers of unemployed lose out.

If useful laws and policy don't die at NEDLAC, they make their way to a Parliament in need of electoral reform. At present, party leaders exercise far too much influence on the legislative choices of MP's, which result in laws that serve party-political ends rather than that of jobs and growth. Cosatu is certainly one such a boss, particularly as illustrated by the 11th hour concessions in respect of the Labour Relations and Employment Equity amendment acts. So, labour and the politicians win and business and the working poor lose out.

With capital being cheap, costs high and productivity low, our surveys show manufacturers wishing to position for long-term survival are currently being tempted to mechanise. Staving this off could be Treasury's Employment Incentives Bill, which wants to compensate for the negative impact the laws mentioned above and other measures have for the prospects of unemployed youth to find jobs.

It wants to make youth labour more affordable for employers, with approved state entities and companies invested in government's special economic zones gaining additional benefits. While this is a step in a positive direction, it may create an uneven dispensation between proven employers and emerging and state companies. Labour leaders making some concessions towards flexibility at the bottom end of the labour market would be far preferable to fiscal incentives. But even if it would grow youth employment, it might just seem too much like losing out.

Fortunately, while some things don't change, some things also do not stay the same either. Government miscalculates that the dynamic in public and private sector unions are the same. Public sector unions benefit from politically determined wage settlements and 11th hour concessions of the nature we recently saw with the labour relations and employment equity amendments in Parliament. Unsustainably or not, their payrolls do not shrink, they grow!

In the private sector, labour has become disaggregated. They have fundamentally lost trust in traditional union management and frameworks, jostling in the tripartite alliance and wage bargaining structures that don't relate to workers' conditions. Service delivery issues, housing and social support are also key concerns. In the private sector payrolls are shrinking and concerns are growing that the policy inertia government has lulled itself into will outlast the timeframes investors are willing to endure to realise profits they could otherwise have done more easily elsewhere.

For the foreseeable future, our labour regime will provide neither employers, nor poor workers or the unemployed with much joy. It will also not inspire much action from government. But there is a light at the end of the tunnel, for the increasing divide between public sector and private sector Cosatu affiliates is opening up ever-greater opportunities for realignment in the labour space. It opens the way for more constructive industry-labour partnerships with more responsive and less interventionist government, such as we have seen in Brazil and some of our other competitors. If this occurs we may well move to a situation where jobs and growth rather than who is in the king tripartite alliance are the real issues at hand, and where the lives of impoverished workers once become worth enough for union leaders and politicians to care about again.

Coenraad Bezuidenhout is the Executive Director of the Manufacturing Circle

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