Inside Labour: The scandal of the working poor

(iStock)
(iStock)

In his maiden Inside Labour column, veteran labour activist Patrick Craven says the reason for the shocking poverty levels in the emerging world is that 41.7% of employed workers are forced into what is termed “vulnerable employment” on poverty wages. This, says Craven, is why unions should continue to demand above-inflation wage increases and not make any concessions to false arguments. He writes:

THE latest World Employment and Social Outlook report by the International Labour Organisation (ILO) predicts that unemployment will grow to 5.8% over the next two years. The number of people in the world without jobs will rise from 197.7 million to 203.8 million in 2018.

This will be especially bad news for South Africa, where the unemployment rate is already six times higher than the predicted figure for the world - 36% by the more realistic expanded definition. We are also the country whose level of inequality was summed up this week by Oxfam in a report which stated that the wealth of three South African billionaires is equal to that of the bottom half of the country's population combined.

READ: These 3 billionaires at top of SA's inequality shocker

One feature of the report however raises important questions for the labour movement. It has always been assumed that unemployment and poverty are related to each other. But this report shows that the “developed” (rich) countries have higher overall levels of unemployment - 6.2% -while the “emerging” (poor) countries have lower levels of 5.7%, dropping to as low as 5.5% in the very poorest countries of Asia and Africa.

This might seem to contradict the view that the higher the level of unemployment, the deeper the level of poverty and vice versa. The report soon reveals however that the reason for the shocking level of poverty in the “emerging” world is that 1.38 billion people - 41.7% of the 3.32 million employed workers - are forced into what is termed “vulnerable employment” on poverty wages, including waste-pickers, informal traders and subsistence farmers. They may not be defined as unemployed but are definitely poor.

READ: Oxfam: Tax-dodging helps these 8 rich men own half world’s wealth – Fair or foul?

In southern Asia the proportion of workers deemed to be in “vulnerable employment” is 73.4%, while in sub-Saharan Africa it is 67.8%. By comparison, the figure for North America is just 6.6%. 

Using a different measurement, the ILO calculates that nearly 62% of workers in sub-Saharan Africa earn less than $3.10 (R43) a day and are thus defined as “working poor”, a statistic it does not even mention for "developed countries".

The simple explanation for the apparent unemployment/poverty contradiction is that the “developed world” has at least some form of unemployment benefits and other social grants which reduce the need to accept any job, however low paid. How ironic that a right-wing politician like Trump wants to cut these benefits and hit hardest the very people who mainly voted for him - the white male working class!

SA has worst of both worlds

South Africa suffers from the worst of both worlds, with one of the world’s highest levels of unemployment and about 5.5 million of the working poor, according to a study in 2015 by UCT researchers based on a poverty line of R4 125. That is why the proposed R3 500 minimum wage is so shocking. It is an attempt to legitimise the poverty of the working poor and force millions to survive on a pittance.

The main lesson from the ILO report is that poverty levels are not so much related to unemployment levels as the appalling quality of the employment millions have to endure.

This utterly refutes the argument of people like the Free Market Foundation that any job is better than no job, and that employed workers are a privileged elite whose “high wages” prevent unemployed workers from getting jobs. This week the FMF’s director, Leon Louw, condemned Cosatu for advocating a minimum wage "at the expense of unemployed South Africans".

On the contrary, most of the employed workers around the world are living in poverty and are virtually no better off than their unemployed neighbours. The only people to benefit if workers moderate their wage claims are the employers, who will extract even more profits from the unpaid labour of their workers and not necessarily take on any new workers. Even in periods of boom when workers may be able to get a few more crumbs, their share of the national income still falls.

That is why unions should continue to demand above-inflation wage increases and not make any concessions to this false argument. But the ILO report also reinforces the message that unions, especially those about to launch the new federation, must move beyond their traditional membership bases and start to organise the 76% of vulnerable workers in South Africa who are not members of any union at all. 

As well as insisting that the new minimum wage must be a living wage, like the R12 500 demanded by the National Union of Metal Workers of South Africa and the Association of Mineworkers and Construction Union, it is also time to revive the campaign for a basic income grant to ensure that no South African, with or without a job, is condemned to a lifetime of poverty.

* Patrick Craven is a former national spokesperson of Cosatu and Numsa and a supporter of the Movement for Socialism, which aims to build a new revolutionary socialist workers’ party. Opinions expressed are his own.

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