COSATU, THE COMMISSION FOR EMPLOYMENT EQUITY AND THE GREAT DIVIDE
In its response to the recent annual report of the Commission for Employment Equity (CEE), Cosatu claimed that the report demolished "the ludicrous assertion by former President FW de Klerk that ‘the main inequality divide in South Africa is no longer between blacks and whites, but between unionised and employed workers on the one hand, and unemployed on the other'".
Not at all.
In the first place the CEE Report itself is woefully inadequate and often inaccurate. Solidarity has published a critique of the report that should be studied by anyone who is interested in the question (see here).
The authors of the CEE report seem to be unaware that in any normal economy the actual and primary purpose of employing and promoting key personnel is to assure the effective and successful management of the undertaking. It should not be compliance with artificial racial criteria that have nothing to do with effective management.
The failure of the CEE and of Cosatu to grasp this point is revealed by their criticism of the Western Cape for failing to meeting to meet rigid racial targets. On the other hand, the CEE is full of praise for the Government elsewhere for being the best performing sector in terms of equity targets. However, they ignore woefully inadequate performance in several provinces and departments - which is due, to a large extent, to appointments based on race rather than merit.
We should all look forward to a naturally evolved situation where management - appointed on the basis of merit, qualifications and experience - will be as representative of our diverse population as possible. Indeed, as the CEE report reveals, we are making steady progress toward this goal. So, for example, the white share of top management declined from 78% in 2001 to 55.2% in 2011. In senior management it dropped even more - from 69.5% to 43.9% and in the professionally qualified group from 52.8% to 26.3%.
Although these statistics are still out of line with national demographics they are not out of line with "the pool of suitably qualified people ... from which the employer may reasonably be expected to promote or appoint employees" - as stipulated by section 42 of the Employment Equity Act. White South Africans comprise 58% of those - over the age of 20 - who have honours degrees and higher and 49% of the pool who have degrees or post-graduate diplomas.
The percentage of whites with these qualifications in the 40 - 60 age group - from which most top managers and senior managers would be appointed - is even higher. Accordingly, closer analysis reveals that the key determinant in the appointment and promotion of senior and top managers may be qualifications and experience - and not race.
None of this affects the truth of FW de Klerk's recent statement that "the main inequality divide in South Africa is no longer between blacks and whites, but between unionised and employed workers on the one hand, and unemployed on the other'".
De Klerk agreed that whites are still the most privileged community in terms of both income and education levels. However, the situation is changing. In 1995 whites accounted for 69% of those in the top earnings decile. By 2007 their share had diminished to 43%. The R11 400 package that Lonmin rock-drill operators receive is already higher than the incomes of 50% of white South Africans. A quarter of white South Africans earn less than R 5 000 a month. They have lower education qualifications and incomes than more than nine million black, coloured and Asian South Africans.
The principal and growing inequality gap is - as F W de Klerk stated - between those who are unionised and employed, and those who are unemployed. 52% of Cosatu's 2.1 million members earn more than R 5 000 per month. This compares with monthly expenditure of less than R 1 200 in 40% of households. The fact that the main source of income in these households is government allowances and not wages points to the central role played by unemployment in causing inequality and poverty in our society.
The main drivers of unemployment are our rigid labour laws, wage increases that bear no relationship with productivity and implacable opposition to any steps to make the labour market more flexible and rational.
· According to the latest Global Competitiveness Report, South Africa is rated third worst out of 142 countries for its hiring and firing practices; fourth worst for labour-employer relations and flexibility in wage determination and 11th worst with regard to pay and productivity.
· Since 1994 wages have far outstripped productivity and inflation. As a result, labour intensity has declined and jobs have been lost. The number of jobs in agriculture fell from 1.5 million in 2002 to 764 000 at the end of 2008; and in mining from 613 000 in 1994 to 321 000 at the end of 2008.
· Since the legalisation of normal trade union activity in the early 1980s, unemployment has grown from less than 10% to its current expanded level of 37%.
· Organised Labour has fought tooth and nail to combat greater labour flexibity. In 2005 Cosatu shot down proposals in the ANC's National General Council for greater labour flexibility. The proposals would have created special industrial development zones; made it easier to hire and fire young job seekers; and exempted small businesses and entire industries from the application of rigid labour laws. Cosatu is vehemently opposed to current proposals for a youth wage subsidy and is determined to abolish labour broking - which is the most rapidly growing sector of the labour market.
The inequalities that continue to exist in the top echelons of the economy involve relatively few people. As has been shown, they often reflect existing skills pools and are changing quite rapidly as those skills pools become more representative of the population as a whole. On the other hand the new inequality divide between the unionised employed and the unemployed detrimentally affects 16 million South Africans. It should be the main priority of the government, of the unions and of all right-thinking South Africans.
Dave Steward is Executive Director of the FW de Klerk Foundation
Click here to sign up to receive our free daily headline email newsletter
