By Solly Phetoe
Key to growing the economy is for South Africa to tackle our stubborn-levels of inequality and poverty. The most effective way is to create decent jobs and pay workers a living wage.
While many condemned the slave wages the apartheid regime paid black workers, these same voices fall silent when these patterns continue in the democratic dispensation by the private sector.
Today we are told by the private sector and some political parties that employers cannot afford to pay a living wage, that we must benchmark what we pay workers with far poorer countries in Asia and Africa.
Yet this same economic logic mysteriously disappears when it comes to the exorbitant pay packages of executives, where CEOs of mining companies can make R300 million a year, but quibble with mineworkers for an extra R150 a month or where banking and retail CEOs make a million rand a week, something bank tellers and supermarket cashiers cannot earn in a decade!
Here we are told we must benchmark the pay of CEOs with their counterparts in the wealthy West!
The economic perversion of paying workers peanuts is not only that we are we condemning millions and future generations to absolute poverty and misery, but we are also blocking any chance of growing the economy.
Factory workers who cannot afford public transport and must be on the road from 4am walking long distances to work will not be productive.
Farmworkers who are paid so little they cannot afford the food or the medicine the body requires will not be productive.
In addition to unlocking our full productive potential, paying workers a pittance denies them the capacity to buy the goods our economy produces and that businesses need to sell to remain afloat, pay workers, create jobs and expand.
Paying workers a living wage is both about eradicating our shameful legacies of poverty and inequality and creating that “Better Life for All”.
The government led by the ANC since 1994 has made tremendous efforts to shift government resources to support the social wage of working-class families and help lift millions out of poverty.
As we enter the space of the GNU, where voters showed their frustrations with the entire political establishment for its collective failures to tackle our stubbornly high-levels of unemployment, poverty and inequality, we must ask what are the immediate tasks to be done?
First, Cosatu urges the President Cyril Ramaphosa to assent to the Companies Amendment Bills, which compel listed companies and SOEs to publicly disclose the wage gap between their lowest and highest-earning employees.
This will be a powerful tool in nudging employers towards ending their shameful wage gap.
In 2019 President Ramaphosa assented to the National Minimum Wage Act, lifting the wages of 6 million poorly paid farm, domestic, construction, hospitality, retail, security, cleaning and other workers.
It has consistently been raised above inflation-levels.
What is needed now is to boost compliance by providing the Department of Employment and Labour the resources it needs to inspect workplaces and enforce compliance.
National Treasury too needs to ensure that all companies doing business with the state are in compliance with it as required by the Employment Equity Act.
The 6th administration spearheaded by former trade, industry and competition minister Ebrahim Patel laid invaluable groundwork by rolling out Employee Shareholder Ownership Programmes, which have seen more than 530 000 employees become shareholders in their companies with dividends designed to boost their earnings, and give them a stake in the companies’ success and productivity.
This needs to be consolidated and expanded across the private sector. It is time workers reaped the reward of their labour.
On September 1, the Two-Pot Pension Reforms will commence introducing the largest reforms of our pension funds since 1994, where workers will now be able to access limited portions of their pension funds, without having to resign from their work when in need of cash.
Simultaneously it will also boost overall savings for retirement to help end the crisis of the majority of South Africans retiring in absolute poverty.
For the first time workers will begin to have a say in how their pension funds are structured and used in a way that benefits them over their career and in their retirement.
These pension reforms need to be accompanied by a shift in investment culture by pension and investment funds, where not only must they seek a healthy return on investments but they must also be done in a way that spurs sustainable local economic growth and creates decent jobs.
The average worker supports seven relatives. The more jobs that can be created, the less pressure there is on those who are employed.
We need a shift from the toxic culture that we have seen in the PIC and many other funds entrusted with workers’ pensions, where a wealthy elite treats these as slush funds for their own self-enrichment.
One of the ANC-led government’s biggest achievements since 1994 is investing 60% of the budget in working-class communities from free housing to subsidised public transport and healthcare to NSFAS funding to 27 million receiving social grants.
These have saved millions from absolute poverty. Some experience administrative challenges that need to be fixed by the new administration. They lay the foundation through the Social Relief of Distress Grant for a Universal Basic Income Grant to ensure no South African is left behind.
The Medium-Term Budget Police Statement (MTBPS) in October needs to massively expand the Presidential Employment Stimulus to enable millions of young people to enter the labour market and gain the skills and experience needed to find work as well as to massively increase financing for industrial and export programmes to grow our manufacturing sectors.
Unemployment, inequality and poverty will not disappear on their own. They need a coordinated and aggressive programme led by the state and supported by all employers.
What we cannot afford to do is to continue to normalise a 42% unemployment rate or our status as one of the world’s most unequal societies.
*Solly Phetoe is general secretary of Cosatu.
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