In the early years of South Africa’s democracy, there was an effort on the part of African National Congress leaders to hold expectations in check. There was also a willingness to compromise on ideological issues.
Whatever, at the time, the party ideologues’ blather about the exact route to be followed to arrive at a socialist Nirvana, it was the pragmatists who held sway. Thabo Mbeki and most of his cabinet ministers recognised the need to keep some fix on reality, albeit only out the corner of the ANC’s eye.
Unfortunately, that’s changed significantly. Jacob Zuma’s crew was too busy stripping the gilded fittings to cram into their suitcases, to fret about the direction in which the ship was sailing. That is, until it dawned that it would serve them very well to obscure their activities under the pseudo-leftist fog of Radical Economic Transformation.
It’s an irony that we today have a billionaire president whose preferred method of dealing with RET is to appear to be the most committed of the radicals. Two explanations are commonly proffered for President Cyril Ramaphosa’s enthusiasm for a slew of disastrously conceived projects, including Expropriation Without Compensation, National Health Insurance, and Trade Minister Ebrahim Patel’s recent dirigiste reindustrialisation plans. ___STEADY_PAYWALL___
First, that this is a canny move by Ramaphosa to defang the most dangerous aspects of these policies, under cover of appearing to be their most ardent proponent. Second, that what you see is what you get and that we have at the helm a billionaire socialist whose massive wealth insulates him from any sympathy for the pain that everyone else will experience if these policies are carried out.
Such detachment from actuality is not only an ANC phenomenon. It is pervasive. Take the world of work.
This week’s StatsSA figures show that official unemployment has reached its highest level in 13 years, with 33.6% joblessness. And despite a surprisingly robust economic revival from last year — our worst slump in a century — at least 1.4m jobs have been lost.
Only 15m South Africans are employed, while social grants are the only source of income for 18m people. Unemployment among the youth (the 15-34 age group) is 46.3% by the narrow definition. That means at least 11m people who are actively seeking work cannot find it.
Job losses are of course inevitable when the economy is in trouble. Employment normally rebounds on the growth upswing. That’s not happening this time.
Employers are keeping payrolls as tight as possible, so South Africa is experiencing jobless growth. One of the reasons for this is our ridiculously pro-union regulatory framework and union militancy.
Massmart — in which the US conglomerate Walmart took an ill-judged US$2.5bn controlling stake a decade ago — owns some of SA’s most popular stores, including Game, Makro and Builders Warehouse. It was hard hit by the pandemic and lost about R6bn in revenue but, admirably, tried to keep afloat through organisational efficiencies rather than retrenchments. Only 1,450 of its 45,000 workers lost their jobs.
It’s now fighting tooth and nail with Congress of SA Trade Unions’ affiliate, Saccawu — the SA Commercial, Catering and Allied Workers Union — over the retrenchment of a further 88 workers. As if to signal their disapproval of Massmart efforts to keep afloat, last week the unions closed down all the stores in a three-day strike. The next step, says Cosatu, is “rolling mass action”.
This is old-style confrontational unionism at its worst. There’s no sense of a common purpose, just an “us” versus “them” — in this case, the capitalist, American exploiters.
There appears to be no comprehension here, on the part of unions, that with growing unemployment, their power is steadily diminishing. Globally, the nature of work is changing rapidly, offering businesses the opportunity to automate and to outsource labour. And locally, the unemployment time bomb has just started ticking.
Until now, all job shedding has been in the private sector. Not a single government employee has been laid off.
But public service job security, as well as salaries that are higher than their private-sector equivalents, is becoming increasingly difficult for the government to guarantee. Bloated payrolls have to be trimmed but the ANC lacks the political will to do so. The market, however, will force its hand.
This week, arms manufacturer Denel joined a growing list of state-owned entities — Eskom, SA Airways, etc — that cannot pay their wage bills. Denel employees received only 20% of their May salaries.
PetroSA also had to send out a Mayday signal. The government has coughed up an emergency R800m cash injection because it, too, couldn’t meet the May payroll.
The SA Post Office has been more inventive in handling the problem. Sapo this week admitted that for more than a year the only way that it had been was able to pay employees was by illegally hanging onto their pension and medical contributions.
Sapo now owes these service providers R842m. It says it is “negotiating payment terms” for the ever-growing amount outstanding, although it cheerfully admits that it, too, is “technically insolvent”.
Its CEO explained to the SABC that Sapo’s “cash cow business unit” was not living up to its potential. Mail revenue had dropped 50% because the mail was not being sorted and delivered on time.
But the post office, has yet another nifty plan. Since its cash cow is dead, it’s going to rustle the one belonging to its neighbour.
Sapo wants to interdict commercial couriers from delivering any items weighing less than one kilogram. These will then be the sole purvey of Sapo — yes, the same Sapo that can’t sort and deliver letters.
Organised labour suffers from the same reality gap as the government that has pandered to it for so long.
Against the backdrop of jobs gloom, the public sector unions affiliated with the SA Federation of Trade Unions this week rejected the government’s 1.5% offer. They are adamant that they will accept nothing less than 7%, about double the rate of inflation and coming on top of a decade of above-inflation settlements.
Cosatu’s public sector affiliates want even more. They’re demanding 8.3%, as well as a 12% “Covid-risk” payment.
At a local government level, the demand is for 7% increases, plus various benefits. Municipal workers in Pretoria — whose mayor has just admitted that the city is bankrupt — want across the board monthly wage increases of R4,000, as well as a monthly R3,500 housing allowance.
These are obviously ludicrous demands but they are being pursued with flinty determination. And in any powerful governing alliance — such as that between the ANC, Cosatu and the SACP — it’s easy for delusions to thrive unchecked. That’s our history for the past two decades or so.
At some stage, however, reality will kick in. The rate at which events are running away from Ramaphosa signals that this might be sooner rather than later.
When that crunch comes, Ramaphosa is going to need some of that Mbeki pragmatism.
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