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In this reply to Adler and Webster's article which immediately precedes this one in SAR, Bassett and Clarke start by saying: "How can COSATU `operate effectively in the political wilderness' that would be its lot if it left the Alliance? Adler and Webster request that all critics of the status quo in South Africa address this dilemma. Yet what we hoped readers took away from our article in the previous issue of SAR was that such a question itself has been rendered irrelevant now that the ANC has demonstrated that it will not seek such a compromise with COSATU. If what Adler and Webster mean by `political wilderness' is the marginalization of organized labour in macro-economic policy making and implementation, then COSATU is already in `the political wilderness.' Thus, its continuation in the Alliance under the present terms hampers its ability to shape the conditions under which the South African working class lives." (jbv)

vol 15 no 2

South Africa: . . . Class struggle
Carolyn Bassett and Marlea Clarke

Printable Version
Southern Africa Report

SAR, Vol 15 No 2, February 2000
Page 7



Carolyn Bassett is completing a doctoral dissertation on COSATU and the economic transition. Marlea Clarke is completing a doctoral dissertation on the trend toward casualization in the South African service sector.

How can COSATU "operate effectively in the political wilderness" that would be its lot if it left the Alliance? Adler and Webster request that all critics of the status quo in South Africa address this dilemma.

Yet what we hoped readers took away from our article in the previous issue of SAR was that such a question itself has been rendered irrelevant now that the ANC has demonstrated that it will not seek such a compromise with COSATU. If what Adler and Webster mean by `political wilderness' is the marginalization of organized labour in macro-economic policy making and implementation, then COSATU is already in `the political wilderness.' Thus, its continuation in the Alliance under the present terms hampers its ability to shape the conditions under which the South African working class lives.

As Bassett had also noted in a previous issue of SAR [Vol. 14 No. 3, May 1999], COSATU's efforts in 1996 and 1997 to reconstitute the Alliance on terms that would give labour more influence over the government's program have come to naught. The real question, as we see it, is how can the COSATU leadership continue to advance the interests and needs of its members in national negotiations without leaving the Alliance? And if this is not possible, how can COSATU leave the Alliance without engendering a split within the federation?

It is precisely this dilemma for organized labour that we believe Adler and Webster miss when they suggest once again that labour's political program should be specifically designed to promote class compromise despite clear indications that such a project is not working out in favour of organized labour or the working class. It is the same dilemma that we believe the COSATU leadership has been avoiding despite all the problems that such participation has entailed, a few of which we outlined in the previous issue of SAR.

Negotiated class compromise

Adler and Webster's argument, in a nutshell, is that a negotiated class compromise is a desirable and feasible mechanism to advance growth, redistribution and democratization in South Africa. They make two main claims. One is that in any policy negotiations that involve the state (or the state and business), not to mention collective bargaining with employers, organized labour must explicitly and deliberately seek a class compromise. To do otherwise risks securing gains for some unionized workers at a cost to economic growth and job creation for the majority. The second claim they make is that organized labour, and specifically COSATU, can best pursue class compromise by remaining within the Alliance. The only alternative, the authors twice assert, is the aforementioned `political wilderness.'

On the first point, Adler and Webster put forward a vision of economic restructuring that is premised on `regulated flexibility' and social citizenship. As a `trade-off,' COSATU would no longer seek improvements in real wages and stronger regulations to protect job security. It is worth examining their case in some detail.

The extent to which Adler and Webster have accepted and incorporated neo-liberal criticisms of trade union demands as illegitimate and privileging `special interests' is quickly evident.

But since when can the wages of even the most strongly organized black workers really be considered `high'? Glenn Adler's careful empirical analysis summarized in a 1996 article co-authored with Gerald O'Sullivan (in Jeremy Baskin, Against the Current), concluded that "the entire argument that unionists' benefits come at the expense of the non-unionised collapses into little more than a heap of self-serving propositions. ... Redistribution from unionised workers to the great mass of non-unionised workers - whether employed, unemployed or in the informal sector - will merely rearrange a limited supply of resources among the underprivileged."

Since 1994, wage increases for the working class have barely held pace with the inflation rate and in too many cases fell below. There is no national minimum wage in South Africa and bargaining councils in the various economic sectors set wages for most workers. Yet only about 13 percent of formal sector workers, excluding agriculture, are covered by the country's 76 bargaining councils. Most workers, therefore, are not covered by union agreements and are protected only by the most basic labour legislation. About 37 percent of formal sector workers earn less than the poverty line. Many clothing workers still earn between 52 Rand ($13.00) and 77 Rand ($19.00) per week. And despite claims by business that a more flexible labour market and lower wages will foster international competitiveness, labour costs in many South African sectors are lower than those in other countries. Labour costs in the clothing, spinning and weaving industries, for example, are lower than in Turkey, Mexico, South Korea or Taiwan. High material costs, outdated machinery and management's lack of innovation - not high labour costs - are what make these sectors relatively uncompetitive.

Indeed, it is a matter of considerable debate whether `high wages' and `high job security' are the cause of the high level of unemployment in South Africa. A 1996 study of wages, productivity, flexibility and unemployment undertaken by the ILO concluded that there was no clear causal link and in fact little correlation between labour costs and labour shedding.

`Regulated flexibility'

Adler and Webster propose that the trade-off for labour's acquiescence in a `regulated flexibility' regime should be gaining influence over investment decisions and productivity strategies to ensure that some of the benefits of growth would also accrue to workers. They make this suggestion as if five years of legislative change to put such a framework into place had not already occurred. Yet although labour laws introduced during the ANC's first term of office explicitly aimed to permit consultation, these laws have limited the terms of that consultation so strictly that the real purpose seems to have been to promote labour flexibility, pure and simple. The 1997 Basic Conditions of Employment Act, for example, provides for the downward variation of many standards. Continuing the trend towards granting small businesses exemptions from legislation, the Minister of Labour recently announced that certain provisions of the Act will not apply to them.

So workers and unions have already been pushed to accept increased flexibility. But what of the quid pro quo? Adler and Webster fail to draw our attention to any instances where workers gained more influence over investment decisions or productivity gains, perhaps precisely because they are so hard to find. Contrary to what Adler and Webster hope will happen, benefits like increased worker participation haven't been realized. Instead, workers have mainly experienced the negative effects of increased labour flexibility. Management has successfully pushed unions to sign agreements outlining processes of flexibility. Indeed, it is increasingly common for South African employers to use `flexi-workers': casual labour, contract labour, sub-contracting to smaller firms, home workers, labour brokers and temporary agencies. Many industries now frequently draw on `independent contractors,' and may even retrench workers and hire them back as `independent contractors.' As such, these workers are not employees as defined in the Labour Relations Act, and consequently, they are not protected by labour legislation and do not fall under bargaining council agreements. It is therefore very difficult to see how pursuing more `regulated flexibility' would reverse current employment trends.

As for macro-economic policy, the government's refusal to negotiate or revise GEAR is only part of the story (albeit an important part). Large areas of macro-economic policy are removed by statute from policy negotiations. For example, the constitution guarantees the autonomy of the Central Bank. COSATU's repeated demands (and those of some government ministers and business leaders) that the central bank's policy of keeping interest rates highly positive (at least 6 percent above the rate of inflation) have gone nowhere. Such policy is not negotiated at all at the Monetary and Fiscal Policy Chamber of the tripartite (business-labour-government) National Economic Development and Labour Council (NEDLAC), even though monetary policy is part of the Chamber's mandate. Fiscal policy, likewise, is the purview of the National Council of Provinces and again beyond the scope of the NEDLAC Chamber even though it also falls within the Chamber's mandate. Unless the government explicitly seeks the input of organized labour there is virtually no way to influence such policy. Yet the Minister of Finance is so hostile to policy negotiations that no consultation occurs. A new Minister of Finance might be more open to seeking the counsel of labour, but nonetheless we would be talking about advice that the government would be free to accept or disregard as it chose. And the ANC government as a whole has already shown with the GEAR debate how it will treat labour's input on macroeconomic policy questions.

In short, the South African government has refused to accord any real power to labour over investment or productivity decisions. Despite new legislation that codifies and sometimes expands worker participation, unions continue to have limited voice in their workplaces. Issues that usually dominate management-worker meetings are petty issues (like where workers can go for smoke breaks) unrelated to productivity or workplace restructuring. And when unions are presented with restructuring plans and invited to respond they are ill equipped to do so. Unions often lack the capacity and specific knowledge of what to ask for even when they have access to company information. When the books are `open,' unions often are overwhelmed and don't know how to make sense of it all quickly enough to develop a counter-proposal to management's restructuring plan. While we do not reject the idea of worker participation, the experience to date suggests that the `right' to participate is meaningless in many workplaces and for many unions. In some cases, `participation' means little more than being consulted about the general terms of their members' retrenchment packages. A gain for the union movement? We hardly think so.

As a trade-off for accepting the dubious `regulated flexibility,' Adler and Webster propose what they call `social citizenship,' by which they mean a social wage. And yet the prospect that sufficient resources will be allocated to provide a social wage by a government that has prioritized cutting government spending is rather bleak. The tendency, as several SAR articles have noted, instead has been to provide basic goods such as water and electricity on the basis of "full cost recovery" - user fees - that accrue to for-profit enterprises that are sub-contracted to deliver services to townships. So township dwellers are charged more for their electricity than people living in middle class homes in established (during the apartheid era) areas since the fees for those who receive new hook-ups must cover the installation costs as well as the usage costs. Moreover, they are expected to pay in advance, an indignity that the middle class is not required to suffer.

Adler and Webster suggest that there is a third element to their vision - increased corporate taxes. Perhaps because increasing corporate taxes needs little explanation they don't discuss it at all in the body of their article. And yet as with `regulated flexibility' and `social citizenship,' proposals to increase corporate taxes enter a political context in which business has already established its case with the government that its taxes are too high. This further suggests that the working class must greet any call for a `social wage' with great scepticism.

Although Adler and Webster raise some important points when they analyze the prospects for a negotiated class compromise over economic policy, their analogy to the South African "political miracle" seems particularly inappropriate. There is no real stalemate. Rather, there is a growing consensus about macro-economic policy, with government and business extremely successful in pursuing their policy agendas. Labour is increasingly marginalized. At the time of writing, the Minister of Labour had just announced that a "team of legal experts" would review labour legislation and draft amendments to it. The key challenge for labour will be to ensure that new policies don't alter the fundamental architecture of the Bill of Rights. With the current labour regime under so much pressure, it is likely that the union movement will focus on defending existing legislation rather than fighting for more rights. In no way do these challenges or struggles suggest that a stalemate has been reached.

In this context, we believe, it is labour's strength through mobilization and the clarity of its goals - not its willingness to forego mobilization and to propose the terms of the compromise - that will permit the best terms for organized workers. And the willingness "to risk making strategic choices that may break with their organization's prior commitments" that Adler and Webster suggest is necessary for successful political negotiations is an explicit request to circumvent worker democracy in order to cut a deal. Finally, Adler and Webster fail entirely to address the question of what COSATU is to do if neither the government nor business is the slightest bit interested in a compromise.

Adler and Webster may feel that they have proposed a workable approach. Their compromise implies that workers must accept lower wages and worse working conditions but these concessions might be mitigated by social citizenship - especially if there was a real and meaningful right to income security. But proposing such a compromise now as if organized workers could rely upon business and the government to uphold their parts of the bargain means ignoring the political developments of the past five years. To ask COSATU to ignore these developments also threatens to make labour vulnerable to demands for further concessions.

Compromise or capitulation?

In the past, when labour has moderated its demands to facilitate a compromise, it has quickly found that business' approach was maximalist and intransigent and that the government would renege on deals and side with business. The most notable instance was when workers agreed to accept tariff cuts in exchange for what they thought was a commitment by the state to support industrial restructuring that would aim to preserve jobs - an agreement that the government refused to carry through.

What Adler and Webster are proposing, in short, is nothing new. They have been making the same arguments time and again for many years. Such an approach already has guided the behaviour of COSATU since at least early 1993 - to the detriment of workers, as it seems increasingly clear. The only thing that is new is that Adler and Webster have further scaled back what they feel labour can legitimately demand!

In this context, Adler and Webster's second assertion that COSATU must remain in the Alliance to pursue its political agenda is particularly unsettling because it limits the federation's political options so much. To claim that the only historical possibilities that COSATU can contemplate are a marginalized and paralyzing role within the Alliance or `political wilderness' surely misrepresents its options. Even if a new `worker's party' or affiliation with an independent SACP is not in the cards, withdrawal from the Alliance does not automatically imply political marginalization nor even, necessarily, an end to political collaboration with the ANC, especially with sympathetic Parliament members. And it certainly does not mean withdrawal from NEDLAC or other negotiation bodies - or a diminished role.

Allowing the ANC to believe that COSATU will never leave because the federation could not face `the political wilderness,' also gives the government an important bargaining chip, serving in turn as a source of political vulnerability for COSATU.

So surely Adler and Webster need to reconsider their position on the Alliance. The evidence that we have presented here and in the previous article suggests that it is COSATU's very membership in the Alliance that is hampering a clear assessment of the political and strategic options that organized labour faces. A weak and compromised COSATU does not serve its membership. And since the ANC is demonstrably not interested in using the Alliance or tripartite structures to put forward a `progressive' alternative that is shaped by labour's stated needs and goals then analytically it would seem that breaking the Alliance makes a good deal of sense.

Of course, there are real difficulties with contemplating leaving the Alliance. Adler and Webster are correct that breaking with the Alliance could quite possibly split COSATU itself. But it seems to us that this would have been more likely in the period before the 1999 election than right now. Surely COSATU is not so weak that it could not survive such a discussion at this opportune moment.

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