Trade unions harm workers with unrealistic demands

So, recently trade unions, such as Saftu and Cosatu, held massive rallies across the country in celebration of May Day, officially known as Workers Day.

These two trade unions, the second largest and largest respectively, seem to be at loggerheads regarding the proposed national minimum wage of R20 per hour, with Cosatu supporting it and Saftu opposing it. This article will analyse Saftu’s opposition to the minimum wage and analyse some of their other demands.

Saftu, with an estimated membership of 800 000 workers, had vocally opposed the proposed minimum wage, even going as far as organising a ‘nation-wide shutdown’ on 25 April. The trade union has repeatedly called the national minimum wage a starvation wage and stated that it merely reinforces the system of unequal income inherited from the Apartheid system. As an alternative to the R3 500 per month minimum wage, Saftu is agitating for a minimum wage of R12 500 per month.

To put this number into context, it is worth noting that the average monthly wage of a South African worker is R14 255. Additionally, Saftu has also railed against unemployment, while imploring the state to increase employment.

Regarding Saftu’s assertion that the minimum wage amounts to slave labour: they are correct in that it is an extremely low wage, as stated recently by President Cyril Ramaphosa as well. It should be noted that, according to another trade union, Fedusa, at least 4,5 million South African workers are currently earning less than R20 per hour and would stand to benefit from the national minimum wage.

As for Saftu’s claim that the minimum wage merely entrenches age-old systems of income inequality, this is clearly false. As mentioned above, 4,5 million workers will benefit from the increase and those in power are aware of the deficiency in the bill. It must be remembered that Ramaphosa was a founding member of Numsa. As such, he is keenly in touch with issues facing workers. The Department of Labour had already pledged to review the minimum wage annually. The currently proposed wage is a baseline on which adjustments can be made as the economic conditions allow it.

As for Saftu’s proposed 250% increase in the minimum wage; they ought to know that this is a totally ridiculous proposition and will never come to pass. Setting the minimum wage near the average earnings of South African workers is an unfeasible proposition and will merely lead to mass-unemployment of unskilled workers, as employers turn to automation as a cheaper alternative. Even the R26 per hour asked for by more moderate trade unions were rejected. Saftu should also know that their ideal minimum wage and demand for more employment are incompatible.

It is a well-known fact that levying minimum wages leads to unemployment as small businesses let go of the workers they can’t afford anymore. Even within the existing minimum wage legislation exemption is made for farm workers, domestic workers and extended public works workers. They will initially be paid anything from 50%-90% of the minimum wage to avoid massive job losses in these industries.

As can be seen, the currently proposed minimum wage stands to benefit upwards of 4,5 million workers. While it is low, it is better than no legislation and will be reviewed annually, and probably adjusted as economic conditions allow it. Furthermore, Saftu’s proposed minimum wage is wholly unrealistic and even if they could implement it, it would lead to massive job losses. As such, by stalling the passing of the existing legislation, Saftu are harming the workers they claim to be helping. 

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