Mine Workers’ Wage Demands – Reaping What Big Business Has Sown?

2016-07-13 19:48

The press has recently been abuzz with news of AMCU’s latest wage demands – these have been initially been directed at a major employer in the platinum mining industry.

AMCU’s demands are for:

- a 15% increase in the basic wage, subject to ensuring a minimum basic monthly wage of not less than R12 500;

- an increase in the monthly Housing Allowance to R5 000

- an increase in the Living Out Allowance to R5 000

- an increase of 5% in the Shift Allowance

- an increase of R2 000 in the monthly Risk Allowance

- an increase of 5% in the Sunday Allowance

- an Operators’ Allowance of R1 500 per month.

In addition to the above, miners also receive employer-funded medical aid and retirement scheme benefits – and it doesn’t appear that these are paid on a “salary sacrifice” basis ie the cost of these benefits do not appear to form part of what is termed their “basic wage”.

Add these items together and I believe that one would get to something like R34 000 – R40 000 per month, for someone on the minimum wage!

I’m aware that newly-qualified attorneys, employed in the legal profession, are currently earning remuneration packages of about half that amount!

My reaction, when first reading of AMCU’s demands, was one of great despondency.


Because the platinum mining industry is currently going through extremely hard times – the platinum price has halved since August 2011 – and it cannot afford such increases in its cost structures!

In fact, mining company, Amplats, recently announced that its half-year profits were between 50% and 70% down!

Other platinum mining companies have recently closed mines/reduced the number of jobs!.

Surely the platinum mining industry cannot afford the increases that AMCU is demanding?!

AMCU has already stated that if the (mining) industry “wants” a strike, then they will oblige – fighting talk (tragically!), indeed!

The thought of another protracted strike, perhaps violent, is just too awful to contemplate!

Such a strike would result in further disinvestment, and the scaring-off of potential (local and foreign) investors, from SA – something that the SA economy can ill-afford at this point in time!

And, hopefully, we won’t have another “Marikana” – if we did, that would certainly put the “final nail in our economy’s coffin”!

It’s been said that should the mines agree to AMCU’s demands, it would result in as much as a 47% increase in their wage bills – surely unaffordable!

But then I thought of the remuneration levels of the senior executives in many of our big corporates (including the mining companies, of course) – these levels can, generally speaking, be described as “obscene”!

I’m aware of one senior mining company executive, a year or two back, having an annual remuneration package of some R45 million (approximately 50% of which comprised the value of share options awarded to him by his employer).

An annual remuneration package of R45 million works out to being remunerated at something like R29 000 per hour for doing a 7-hour day (after taking account of annual/sick leave etc)!

There’s no doubt that R29 000 per hour is “obscene”!

I’m certainly no communist/socialist and I believe that those who are highly skilled, and who are occupying very responsible and stressful management positions, should be handsomely rewarded … but not “obscenely” so!

I then asked myself whether the mining industry (like many other industries in this country) was, in fact, asking for what they were getting when it comes to double-digit wage demands, protracted strikes etc.

I must confess, I think that they are!

A few weeks ago, it was reported, in the press, that the CEO of a listed company stood to make R1,2 billion on shares awarded to him over his 26 years with the company. Yes, that’s R1,2 billion (NOT million)!

Not for the life of me, can I accept that such “remuneration” (because that’s what it is!) is remotely fair or reasonable!

And don’t forget, this CEO would have been receiving his “normal” (no doubt, “very generous”) remuneration and bonuses during that 26-year period!

In my book, the R1,2 billion – even over 26 years! – is extremely excessive (I’m being polite when I describe it as that!) and it’s payments like these, and the R45 million remuneration that I refer to above, that must surely provide the tinder for labour’s excessive wage demands, strikes, labour unrest, violence etc.

I think that the time has come when business needs to engage in some introspection because I believe that the way things are heading, REMUNERATION-WISE, the communication/relationship gap between workers and management could soon be too big to ever close … and then who knows where that will take us?

Heaven forbid, that we reach that stage!

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