The contemptuous cash hoarding by South African companies poses a threat to labour peace and social stability
3 August 2017
The recent revelations by the DTI funded research ,conducted by the University Of Johannesburg’s Centre For Competition Regulation and Economic Development, that cash reserves in the JSE’s largest 50 companies had increased from R242bn to R1.4-trillion between 2005 and 2016 are disquieting to say the least. This contemptuous cash hoarding is happening at a time when the economy is stagnating and is also hemorrhaging thousands of jobs every day.
It is not clear why SA companies are reinvesting their profits in an economy that has served the so well and expand their operations and hire more people. This clearly shows that the governments ‘trickle down economic policies such as GEAR/NDP have failed the majority as they have guaranteed profits for a few individuals and poverty for the rest of us. Trickle down economy seek to promote the making of high profits by private companies with a view that the shareholders in these companies will re-invest their profits. However, private shareholders have now become a threat to industrial stability, labour peace in the workplace because they are choosing to retrench employees in order to increase and maximise their profits.
Currently, over half of the workforce earns less R3700 per month and one third of population is reliant on social grants. The reasons for this dependency are precisely because the profits made by private companies have not trickled down to the majority through high wages and decent jobs. Despite overwhelming evidence of failed free market policies the government led by the Treasury has refused to regulate private capital and to change the economic policies.
The unemployment rate is currently 38% and for blacks 40%. The failed trickle down economic have failed to protect more than 90% of population of which 80% is black from the greedy private shareholders and monopolies and oligopolies.