Time to look ahead

2009-08-13 00:00

AS we breathe a sigh of relief that the municipal strike is finally over and we can get on with the bigger task of effective and efficient service delivery, it is critical that we take stock of the implications of the recently-signed agreement. We need to commend the workers for sacrificing their livelihood, albeit temporarily, in order to make a public statement about their plight, in view of the recession. As the old adage goes: “no pain, no gain.” Workers will, over time, compensate for their temporary loss of income through the “no work, no pay” principle enshrined in the Labour Relations Act.

I am sure that it was the intention of those taking part in the industrial action to attempt to seriously close the wage gap, which is the result of past policies, and to enhance the socio-economic status of the working class. The working class is currently languishing at the bottom of the social pyramid, just one level above the unemploy­ed, unemployable and social outcasts. The gains made through industrial action will, hopefully, set the working class on a trajectory towards social and economic upliftment.

The noble intention of closing the wage gap must be seen against the recent condemnation of the huge salaries and perks enjoyed by so-called “fat cats”, including municipal managers and CEOs in JSE-listed companies. The recent gains by workers will lead, over time, towards a more socially equitable and peaceful society, with less crime and similar social ills.

Indeed, such noble intentions should be commended in view of the high Gini coefficient in our South African society. Research seems to indicate that South Africa’s Gini coefficient, which measures the level of inequality in a country, is unacceptably high and potentially hazardous.

However, the model employed in the wage negotiations assumes that the current wage structure is non-problematic and hence wages are increased by a common constant applicable to all and sundry. In other words, wages are increased by a common percentage “across the board”, and as such, upon closer scrutiny, tend to widen the wage gap instead of narrowing it.

To drive the point home, the current increase of the wage level by 13% “across the board” applies to all workers. Among these workers is a select band of managers whose packages are bargained at a central level. The 13% increase to a general worker does not equate to the 13% increase, in monetary terms, for the select band of managers who are currently earning sizable incomes. In this scenario, “the poor get poorer and the empowered get more empowered”.

The current model of wage negotiations, at least in the local government sphere, treats unequal workers equally. Nothing could be more dangerous.

As the impact of salary hikes is quantified and factored into the budget, it will be important to disaggregate it according to different bands of workers. This disaggregation will assist in unpacking and analysing the impact accordingly. Such analysis will undoubtedly reveal the shortcomings of the current wage negotiation model.

It is high time that the labour movement, as vanguards of the struggle for social and economic justice, begin to interrogate and disaggregate these impacts, with the view to employing a different model during wage negotiations. The sliding scale model that was used in the health sector offers a fair and good point of departure.

Before long, the current salary hikes will cost far more in service delivery terms. Invariably, consumers will be expected to carry the cost. It will even be more unfortunate if the salary hikes do not come with commensurate gains in productivity and quality of service provision.

Consumers may receive the double blow of having to absorb the cost of salary hikes by paying more for services. Even more worrying is the prospect of the diversion of resources from the service delivery vote to the salary vote. Stealing from Peter to pay Paul would be a recipe for disaster, as currently manifested in the recent service delivery protestations.

It is therefore time to look ahead at the full implications of wage negotiations and critically reflect on both the intended and unintended consequences thereof. It may be too late to detonate the time bomb brought about by these unintended consequences, but it may be worth it to pause a little and at least question the current model that threatens the long term sustainability of the local sphere of government.

 

• Sbu Khuzwayo is the municipal manager of uMgungundlovu District Municipality. He writes in his personal capacity.

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