Union federation’s many contradictions are shown up by viewing its positions through the prism of the general good, writes Loane Sharp.

This article by Loane Sharp, a Labour Economist with Adcorp, was first published in Business Day today – Naked self-interest drives Cosatu policies.

Business Day kindly allows me to post extracts but the entire article can be read by clicking on the link or going to Business Day.

“THERE is one lesson that university academics have systematically failed to teach economics students: it is an error to evaluate a policy, such as the youth employment subsidy, on its effects on a special group, such as unemployed youth or trade union members. We should trace the effects of a proposed policy not only to some special interest in the short run, but to the general interest in the long run.”

“The study of economics should make us suspicious of the special pleading of selfish interests, for they are almost never aligned with the common good. If we apply this mode of analysis to the most powerful special interest in SA, the Congress of South African Trade Unions (Cosatu), some useful insights arise.”

A number of important questions are asked and answered.

• Why does Cosatu oppose e-tolling?

• Why, in direct contradiction of the point above, is Cosatu indifferent towards the Expanded Public Works Programme ?

• Why does Cosatu promote the myth of the “working poor”?

• Why does Cosatu oppose labour brokers?

• Why does Cosatu oppose the youth wage subsidy?

• Why does Cosatu oppose performance-based pay?

• Why does Cosatu support the minimum wage and social grants?

• Why does Cosatu oppose private capital investment?

• Why, in direct contradiction of the point above, does Cosatu vocally support the capital-intensive manufacturing industry?

• Why does Cosatu in effect oppose greater employment?

“Astonishingly, trade unions have succeeded in persuading managers and the general public that wages should be linked, not to labour productivity, but to the cost of living. Higher wages lead (through lower employment) to lower potential union membership, and lower wages lead (through higher employment) to higher potential union membership.”

“Cosatu is therefore involved in a delicate balancing act between adding new members and reducing the wages and benefits of existing members. It cannot have both, and time after time the gavel falls on the side of existing members for the simple reason that union membership and, more importantly, union dues are declining.”

“Cosatu’s position on other matters can be evaluated in the same classical way. We see clearly Cosatu’s special pleading cannot lead to the general good. Its special, short-run interests when viewed systematically are a jumble of self-interested positions that are either incoherent or mutually contradictory when viewed from the perspective of the general good.”