ANC's ideological arteriosclerosis throttles job growth

It’s one of the staples of South African journalism. It plays as comedy but it is actually closer to tragedy.

The scenario is a congress of one of the trade unions or leftist political movements. The delegates, uniformly attired in radical chic T-shirts and caps, express solidarity with the exploited working class and declaim that the only tolerable employment is that which delivers “decent work”.

Then a bored reporter checks the tags in the registration pack clothing. Predictably, they are made in China and sold here at prices that local low-end textile producers, mostly sited in KwaZulu-Natal and northern Free State, cannot possibly compete with.

This then plays out as red-faced farce, with union officials spluttering unconvincing explanations of why they chose sweatshop imports over “decent wage” locally made textiles. Explaining, that is, without admitting to the obvious: costs matter, even to the revolutionary vanguard.

The unfunny side is that this is all emblematic of an ideological arteriosclerosis that is holding back the country’s economy. In the illusory pursuit of a high-wage, sophisticated manufacturing base – something that SA has neither the skills nor the domestic capital to create on a meaningful scale – low-wage, labour intensive enterprise is wilfully being destroyed.

Aside from the humane social aspect, it is obviously desirable that workers are well paid. It means that they have some disposable income, after taking care of their basic needs, whereas at present much of consumer spending is funded from borrowings by the working poor from rapacious moneylenders on crippling terms. Politically, it ensures a citizenry with a stake in stability.

But in a country where about 60% of the population is under 34 years-old and more than half of those in the 15-24 year-old bracket are unemployed – the third worst such rate in the world after Greece and Portugal – even poorly paid jobs are coveted. The hoary adage about half a loaf being better than none might not be heeded in the bastions of SA’s labour aristocracy, but it is among those who tramp the streets looking to get a foot in the door, any door.

Economist Prof Nicoli Nattrass writes in the Helen Suzman Foundation’s Focus magazine that there has long been a gulf between shopfloor unionists and their leaders. She recounts that in the mid-1990s on a visit to inspect marginally profitable textile factories in the former homeland of Qwa-Qwa, the local SA Clothing and Textile Workers Union (Sactwu) organiser – fearing an exodus of factories to neighbouring Lesotho – was desperately trying to reassure factory owners that minimum wage legislation would be judiciously implemented.

At the same time the then deputy general secretary of Sactwu, one Ebrahim Patel, was publicly dismissing these Chinese and Taiwanese clothing factories as “fly-by-night sweatshops” that had no place in the new South Africa. The same Patel is now minister of Economic Development and along with Labour Minister Mildred Oliphant continues to abet the destruction of labour-intensive manufacturing.

In May Oliphant unilaterally gazetted an extension of the textile industry National Bargaining Council minimum wage, making it applicable to small, non-member, firms. Some 20 000 additional workers will now get the minimum wage, an admirable achievement were it not for the fact that many of these already financially precarious enterprises will as consequence now go out of business. It’s telling that not one of the factories that Nattrass visited in 1995 has survived.

Nattrass believes that Patel’s “visceral distaste for the low-wage labour-intensive manufacturing has become hegemonic”. Even the National Development Plan, which concedes that given SA’s high unemployment, growth would ideally be through labour-intensive job creation, comes down on the side of capital-intensive growth, in order to be internationally competitive.

Nattrass writes, rather lyrically for a practitioner of the dismal science, “South African society comprises islands of high-wage formal employment and privilege in a vast sea of low-wage informal employment and unemployment. Our policies focus on improving the lives of those on dry land… [and] the islands are pretty good places to live. But we do very little to help people reach the beaches and we turn a blind eye to the ways in which our policies generate strong off-shore winds.”

General Motors, the epitome of the high-wage capital-intensive manufacturer that the likes of Patel put their faith in, announced this week it won’t be investing any more capital or creating and further jobs in SA because of our labour instability. It’s Africa president, Mario Spangenberg, is blunt: “The reality is SA cannot expect multinationals to invest here as part of a social responsibility project.”

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