With the kind permission of Business Day I am able to post some extracts from the article but it should be read in Business Day or by clicking on the link.
“THE Congress of South African Trade Unions (Cosatu) is proposing the introduction of a national minimum wage and a radical overhaul of the collective bargaining system, according to a draft policy document to be discussed at its congress in September.”
“The national minimum wage — which last year would have been R4800-R6000 according to Cosatu’s calculations — would, coupled with collective bargaining ‘forge a new wage policy for SA’, the document reads.”
“‘We are therefore at a strategic crossroads. Either we continue the current approach of trying to win wage battles purely at a sectoral level, with the danger of systematically being driven back, particularly in low wage areas of the economy … or we adopt a new approach, which builds on the strengths of a reconfigured centralised bargaining system and combines this with the exercise of state regulation through the implementation of a national minimum wage, and comprehensive social protection,’ it argued.”
“South African Chamber of Commerce and Industry CE Neren Rau said the proposals did not adequately take into account the structural weaknesses partly responsible for the plight of SA’s workers — such as skills shortages, lack of economic momentum and labour militancy.”
“A national minimum wage was more ‘interventionist’, which spelled rigidity, when what the country needed was more labour flexibility. Mr Rau warned of ‘unintended consequences’, including a flight by employers to lower wage levels away from higher-salaried, older workers.”
“The document recommended that if Cosatu endorsed the proposals, it should develop a political strategy to ensure buy-in from the ANC by the end of this year for implementation next year.”
“An overhaul of collective bargaining would include
• ‘wall-to-wall mandatory’ sectoral bargaining;
• the demarcation of national sectors;
• an alignment with developmental strategies, industrial policy, skills, retirement funds; and
• an explicit mandate to address wage and income inequalities.”
“Cosatu spokesman Patrick Craven said the draft document had been distributed to affiliates for discussion.”
daan
on June 6, 2012 at 11:31 am
An excellent initiative – let us support them constructively and get the debate going BUT on the factual basis of ‘value exchange’.
With the kind permission of Business Day I am posting some extracts from the editorial but the whole editorial should be read in Business Day or by clicking on the link.
“The Congress of South African Trade Unions’ (Cosatu’s) call for the government to introduce a national minimum wage is nothing more than cynical political muscle-flexing. The draft policy document released by Cosatu this week calls for a radical overhaul of the collective bargaining system, including doing away with sectoral bargaining councils in favour of a centralised bargaining council and a single, national statutory wage.”
“What makes this latest policy shift particularly opportunistic is that the unions have up until now been the keenest proponents of sectoral minimum wages. For Cosatu to do an about-turn on an issue it has staunchly supported for so long is suspicious to say the least — it is no doubt polishing its marble with workers during the build-up to the African National Congress’s electoral conference at Mangaung, where it hopes to be kingmaker.”
“However, from an economic and employment perspective the proposal is just daft. Pushing for a national minimum wage that ignores sectoral and geographic differences will make an already overly rigid labour market even less flexible. And setting a minimum wage above the market-clearing equilibrium price can only lead to one thing: a huge rise in unemployment. While the laws protecting workers might prevent an immediate drop in employment figures, in the long run, employers will choose to replace retiring workers with more cost-effective machinery.”
“The difficulty in enforcing higher than market-clearing minimum wages is something Cosatu is all too familiar with. Wage negotiations between Apparel Manufacturers of SA (Amsa) and the Southern African Clothing an Textile Workers Union (Sactwu) reached stalemate last month after the union refused to accept the terms of prescribed minimum wages for the industry, which are widely flouted in contravention of the statutory wage agreement. Sactwu is reluctant to uphold its side of the agreement because it knows this will mean factory closures. Amsa, on the other hand, is understandably opposed to wage agreements being applied selectively.”
“In theory, the introduction of a national minimum wage at the right level could make the labour market more efficient. There are currently more than 36 statutory minimum wages that vary by occupation, sector and location — a veritable dog’s breakfast. However, to increase employment rather than decrease it, the new national minimum wage would have to be set considerably lower than many of the existing sectoral minimums. The existing high levels of non compliance by employers — despite harsh sanctions — is an indicator that many of the existing minimum wages are already too high.”
“The leadership of Cosatu is no doubt well aware of the economic consequences of introducing a national minimum wage at the suggested level. It has launched a kite it knows will not fly, but has done so to take advantage of its perceived hold over President Jacob Zuma, who needs union support to triumph at Mangaung.”
Today Business Day was the first to publish an article on the front page by Natasha Marrian Cosatu set to push for minimum wage policy.
With the kind permission of Business Day I am able to post some extracts from the article but it should be read in Business Day or by clicking on the link.
“THE Congress of South African Trade Unions (Cosatu) is proposing the introduction of a national minimum wage and a radical overhaul of the collective bargaining system, according to a draft policy document to be discussed at its congress in September.”
“The national minimum wage — which last year would have been R4800-R6000 according to Cosatu’s calculations — would, coupled with collective bargaining ‘forge a new wage policy for SA’, the document reads.”
“‘We are therefore at a strategic crossroads. Either we continue the current approach of trying to win wage battles purely at a sectoral level, with the danger of systematically being driven back, particularly in low wage areas of the economy … or we adopt a new approach, which builds on the strengths of a reconfigured centralised bargaining system and combines this with the exercise of state regulation through the implementation of a national minimum wage, and comprehensive social protection,’ it argued.”
“South African Chamber of Commerce and Industry CE Neren Rau said the proposals did not adequately take into account the structural weaknesses partly responsible for the plight of SA’s workers — such as skills shortages, lack of economic momentum and labour militancy.”
“A national minimum wage was more ‘interventionist’, which spelled rigidity, when what the country needed was more labour flexibility. Mr Rau warned of ‘unintended consequences’, including a flight by employers to lower wage levels away from higher-salaried, older workers.”
“The document recommended that if Cosatu endorsed the proposals, it should develop a political strategy to ensure buy-in from the ANC by the end of this year for implementation next year.”
“An overhaul of collective bargaining would include
• ‘wall-to-wall mandatory’ sectoral bargaining;
• the demarcation of national sectors;
• an alignment with developmental strategies, industrial policy, skills, retirement funds; and
• an explicit mandate to address wage and income inequalities.”
“Cosatu spokesman Patrick Craven said the draft document had been distributed to affiliates for discussion.”
An excellent initiative – let us support them constructively and get the debate going BUT on the factual basis of ‘value exchange’.
Today Business Day was the first to publish an editorial – Minimum-wage kite won’t fly.
With the kind permission of Business Day I am posting some extracts from the editorial but the whole editorial should be read in Business Day or by clicking on the link.
“The Congress of South African Trade Unions’ (Cosatu’s) call for the government to introduce a national minimum wage is nothing more than cynical political muscle-flexing. The draft policy document released by Cosatu this week calls for a radical overhaul of the collective bargaining system, including doing away with sectoral bargaining councils in favour of a centralised bargaining council and a single, national statutory wage.”
“What makes this latest policy shift particularly opportunistic is that the unions have up until now been the keenest proponents of sectoral minimum wages. For Cosatu to do an about-turn on an issue it has staunchly supported for so long is suspicious to say the least — it is no doubt polishing its marble with workers during the build-up to the African National Congress’s electoral conference at Mangaung, where it hopes to be kingmaker.”
“However, from an economic and employment perspective the proposal is just daft. Pushing for a national minimum wage that ignores sectoral and geographic differences will make an already overly rigid labour market even less flexible. And setting a minimum wage above the market-clearing equilibrium price can only lead to one thing: a huge rise in unemployment. While the laws protecting workers might prevent an immediate drop in employment figures, in the long run, employers will choose to replace retiring workers with more cost-effective machinery.”
“The difficulty in enforcing higher than market-clearing minimum wages is something Cosatu is all too familiar with. Wage negotiations between Apparel Manufacturers of SA (Amsa) and the Southern African Clothing an Textile Workers Union (Sactwu) reached stalemate last month after the union refused to accept the terms of prescribed minimum wages for the industry, which are widely flouted in contravention of the statutory wage agreement. Sactwu is reluctant to uphold its side of the agreement because it knows this will mean factory closures. Amsa, on the other hand, is understandably opposed to wage agreements being applied selectively.”
“In theory, the introduction of a national minimum wage at the right level could make the labour market more efficient. There are currently more than 36 statutory minimum wages that vary by occupation, sector and location — a veritable dog’s breakfast. However, to increase employment rather than decrease it, the new national minimum wage would have to be set considerably lower than many of the existing sectoral minimums. The existing high levels of non compliance by employers — despite harsh sanctions — is an indicator that many of the existing minimum wages are already too high.”
“The leadership of Cosatu is no doubt well aware of the economic consequences of introducing a national minimum wage at the suggested level. It has launched a kite it knows will not fly, but has done so to take advantage of its perceived hold over President Jacob Zuma, who needs union support to triumph at Mangaung.”