Address by COSATU General Secretary, Zwelinzima Vavi, to the Nedlac Labour School, 1 February 2012, Tshwane

Thank you very much for inviting me to address this important meeting of workers' leaders. Let me start, as always at such gatherings, by congratulating you all on the great work that you do day-in, day-out, most of it out of the limelight, in NEDLAC's chambers and committees.

However frustrating at times it can be to toil away, negotiating with government and business, there is still no doubt that without Nedlac, and your contributions to it, we would be far worse off, and we must resist any attempts to limit its role and effectiveness. 

We face many massive challenges this year. Yet again unemployment has to be the biggest. With 7 504 000 people unemployed - 36% of the working population by the more realistic expanded definition which includes ‘discouraged' job seekers - South Africa's rate of unemployment is way above that of any similar middle-income country.

This shocking number of people with no work is the main reason why between 40% and 50% of South Africans live in poverty and we have become the most unequal society in the world, with 50% of the population living on 8% of the national income.

We are not short of plans, programmes and targets - to create five million new jobs by 2020, but despite a tiny improvement towards the end of 2011, we have not even started to tackle this enormous problem.

The underlying problems are that South Africa, and many other African countries, suffer from the intersection of two massive problems: (1) our failure to escape from the economic growth path which we inherited from colonialism and apartheid, and (2) effective exclusion of the poor majority from involvement in the market economy.

The economy is still very over-dependent on mineral exports. 

The other dominant sector has been finance, which since 1975 has outperformed the non-financial sector. By 2005, the sector was growing at almost twice the rate of the non-financial sector.

Economies around the world that have developed fastest have been those with dynamic manufacturing industries. It is estimated that, on average, a 1% gain in the growth rate of manufacturing value added leads to a 0.49% gain in overall economic growth.

Yet such sectors that have driven growth in successful economies elsewhere are precisely those where South Africa is weakest, such as the manufacturing of machinery and transport equipment, which are major drivers of economic growth and jobs.

That is why we need a new growth path which will build an economy in which the manufacturing sector is dominant.

The second key problem is the low levels of effective demand, which simply means that too many South Africans have little or nothing to spend of goods and services.

Most of the very poor are in the ranks of the unemployed, but as we know, there is also a rising population of the working poor, which, as the ANC said in its 2009 Manifesto, has been made even bigger by the runaway growth of casualisation of labour and the burgeoning of labour brokers, against whom we shall be talking to the streets on 7 March.

Casualisation atomizes workers, deprives them of benefits and job security, intensifies competition among them, and drives down wages. That is why employers are still so keen on it. But rather than admit that they simple want to exploit workers more ruthlessly they try to convince us that I the long run cutting wages, making it easier to retrench them and relaxing ‘inflexible' labour laws is the key to creating more jobs.

This could not be more wrong. Quite apart from the misery all this inflicts on workers' families, cutting wages and benefits starts a downward spiral, leading to less demand for goods and services, causing even more job losses, and thus more people with no money to spend and therefore even less demand for goods and services and so on.

Both these fundamental problems - the decline of manufacturing and the fall in disposable incomes - has been made even worse by the neoliberal policies of the past 16 years, notably the adoption of the misnamed Growth, Employment and Redistribution Strategy (GEAR) in the 1990s, which promoted the unrestrained operation of the capitalist system.

Its justification was that the economy must first promote growth and more wealth, which will then trickle down to raise people's incomes and thereby lead to a growth in consumption. It is a policy that has spectacularly failed, as unemployment, poverty and inequality have all got worse.

Full employment - meaning a decent job for everyone of working age who is willing and able to work - cannot be delivered simply by the operation of market forces. That is why we need a new growth path, at the heart of which will be a strong developmental state which will intervene decisively in the economy to redistribute resources.

Labour has welcomed many features of the government's New Growth Path, though we remain concerned at the discrepancy between the bold plans of the Trade & Industry and Economic Development Departments for the promotion of investment in manufacturing, with the cautious fiscal and monetary policies of the Treasury, which are putting the brakes on these plans.

The trade unions have begun to play their role in promoting a new growth path and creating jobs. Labour and the other three Nedlac constituencies have entered into agreements with government departments, and have signed the following accords, all of which will help us to play our full part in creating 5 million new jobs by 2020:

1. The Basic Education Accord, premised on the realisation by every stakeholder that our education system is not producing expected results from Grade 1 to 12, which will in the long run have a negative impact on job creation and the economic future of the country.

2. The National Skills Accord, aimed at expanding and improving training.

3. The Local Procurement Accord, in line with the goals of the Industrial Policy Action Plan (IPAP 2).

4. The Green Economy Accord, signed on 17 November, timed to coincide with the 17th Conference of Parties on Climate Change taking place in Durban, which has a rich potential to create more jobs and create a healthier world.

The task facing Nedlac constituencies is now to turn these excellent agreements into real improvements in people's lives.

Some epic battles lie ahead this year.

Government is still set on bringing in its youth wage subsidy, which is based on the false assumption that the cause of unemployment is the high cost of labour. It peddles the illusion that jobs for young workers can be created by tax-payers subsidising firms to hire them at a lower cost and thereby encourage them to employ more young people. The clear danger is that employers will simple retrench an equal number of older workers and thus create no more jobs overall.

We must also oppose the idea that the period for conciliation on an issue which might give rise to a strike or lock-out should be extended to 60 days. Anger will build up as workers see their right to strike being eroded by a long conciliation period, with no guarantee that employers will use this period to settle matters.

Another worry is the proposed return to compulsory ballots prior to calling a strike, a ballot which would have to be verified by the CCMA, Bargaining Council or an accredited agency.

We must also object to changes to the right to picket, such as picketing to be limited to the members of the union calling the strike and no strike unless picketing rules have been agreed or determined, which could effectively ban picketing in certain sectors.

Another issue is proposals on violence during strikes. All of us are clear that violence and intimidation have no place in strikes and society in general, but violence is a social problem, extending beyond the labour market, and it will not be solved by a quick knee-jerk reaction of making unions liable for any unlawful acts by anyone on a picket line or for any damage caused on the vicinity of an event they have organised.

All these proposals are a direct attack on trade unions and we are determined to resist them.

Finally I urge you all, and indeed the other Nedlac constituencies, to back Corruption Watch, which can help us to expose, prosecute and punish those guilty of corruption, theft and mismanagement of public resources and start to put a stop to this theft from the people of South Africa.

Corruption Watch will provide whistle-blowers with a website to report cases of corruption. It will investigate allegations and hand over prima facie evidence to the authorities.

The aim is to for every South African to play a part in isolating and shaming the culprits. It will help to establish a tradition that those caught with their hands in the till will voluntarily resign, shamed by the weight of public disapproval, rather than, as we have seen recently, defiantly remaining in office while the evidence against them mounts up.

I wish you a very fruitful few days and am confident that you will continue to fight the good fight for workers' interests in Nedlac throughout this challenging and eventful year of 2012.

Issued by COSATU, February 1 2012

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