AMCU exposes the Original Sin of “Workers’ Rights”

2014-07-13 09:42

Trade Unions emerged in the wake of the Industrial Revolution to “balance” the interests of workers against those of businesses that employed labour in new industries that caused rapid urbanization, overcrowding and poor living conditions. To the uneducated mind this sounded reasonable and just, and - to those of ostensibly charitable disposition - necessary.

And although the trade union movement has since become recognized as a democratic institution and talisman of the oppressed and downtrodden, the notion is fundamentally flawed and harmful to the greater good of society.

For why should “workers” who choose (or may indeed be forced under certain circumstances) to belong to a trade union and engage in “collective bargaining” have an additional suite of rights? Are we not all – at least in theory – protected by basic human rights enshrined in our constitution?

The latest strikes in South Africa’s platinum belt confirm this flaw – as I shall demonstrate.

But let’s start by examining the economic logic of the trade union movement.

Trade unions have as their purpose the attachment of the largest share of the cake possible for relatively unskilled and numerically abundant employees with little to offer that is unique. Thus – because they push up costs without adding value - trade unions are by definition, inflationary and, as anyone with the most meagre knowledge of economics would know, inflation constitutes a tax on the poor.

So - unfashionably but in truth - trade unions’ raison d’être is parochial and anti-poor.

Secondly, basic trade union precepts defy economic logic.

They do not, as would seem reasonable aim to ensure a fair and sustainable long term return on workers’ efforts, because the term “fair” would require analysis, definition and agreement – to which they invariably nurse an aversion.

But in the event that fairness were to become a prerequisite, would it not be reasonable to recognize –

• The legitimacy of material rewards based on merit in preference to blanket rewards across the board that bear little or no relationship to productivity or individual contributions – as trade unions insist on?

• The wisdom of increasing remuneration by no more than is necessary to ensure continuity - and possibly even growth - in the number of jobs on offer in the industry concerned?

• The inevitability that extortionate remuneration growth will encourage the substitution of capital, plant and machinery and the deployment of new technologies to substitute for unskilled and semi skilled workers?


• The economic reality of needing investment capital, in the absence of which jobs will simply never be created. Or worse still – losing jobs by closing down businesses - or their failing to expand?

For if none of these are recognized – as is the case in South Africa’s labour relations paradigm – the outcome is growing unemployment and ultimate disaster. Not to get too distracted by common sense however, here were a few snippets following the end of the platinum belt strike.

1. From filmmakers and “social justice activists” who work at Media for Justice, quoting one “Andile” whose name had been changed to protect his identity (and for whose grammar and means of expression I take no responsibility) –

“ things will never be the same on the platinum belt again. Neither in South Africa, as this historic moment has intrinsically shown that workers united can and will effect change and amend history.”

“they have struck the most victorious blow against capital and this has the vast potential to systemically alter both the mining industry and big business in this country.”

“It is though a resounding victory that has struck fear into the guts of the mine bosses, their BEE partners and the state, as it signifies the potential for widespread change which could have a domino effect in the wider working-class struggle and wage relations in the near future.”

..and so forth

2. Then, on the cover of July 10th Finweek, “AMCU’s MOMENT” is proclaimed with the additional words it “stepped up where other unions had failed”.

But by any common sense measure AMCU actually failed – big time.

But maybe not, depending on its true objectives. On the Rustenburg mines AMCU achieved “an increase in labour costs of between 10% and 11% over a three year period, pretty much the same that was accepted at Northam Platinum by NUM earlier in the year - and far from the R12500 demand for all workers that Mathunjwa (AMCU’s boss) made his clarion call in the run-up to the strike and during its progress” - refer Finweek page 11.

By any reasonable measure - and seen against its stated objectives - the strike was a national disaster and a failure that cost business about R30bn and workers R10,6bn in lost wages.

And the economy shrunk by 0,6% in the first quarter.

But hey! AMCU stuck it to NUM – so there was at least one winner – Joseph Mathunjwa.

And what now?

After the strike had ended, Amplats’s Griffith said “the days of restructuring the Rustenburg mines (is) over.” There will now be only “optimization”. At the same time Anglo American Platinum is likewise re-evaluating the sustainability of all its platinum operations in order to “ensure the business continues to remain viable”.

And Implats has growth options in Zimbabwe that although currently politically complex might, according to its CEO become the focus of the company’s long term growth.

So how does the very real dysfunctionality that has become institutionalized in the nation’s economic fabric square with the chauvinism of the people “on the ground”?

The answer is easy: it does not. And worse still - the employees do not even know it.

Business at large has reached the realization that in order to survive it needs less people of the laboring “worker” class, greater mechanization, access to imported inputs and plenty of technology. And these are available in abundance.

The upshot is that we can look forward to our economy shedding tens of thousands of jobs in double quick time.

And so we come full circle.

When trade unions sought to “balance” the interests of workers against capital during the Industrial Revolution they clearly overlooked the reality that nobody gets paid more than they are worth for very long.

Now the platinum belt – that national icon of worker disenchantment and economic self destruction – has become a curious exhibit for the original sin of “workers’ rights” as their jobs self-destruct.

Sadly they are the forerunners of many in mining, manufacturing and the economy at large who will also no doubt refuse to connect the dots.

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