BusinessDay

BY CYNTHIA MACHABA, FEBRUARY 19 2015, 14:24

IT IS scandalous that President Jacob Zuma’s state of the nation address made hardly any reference to the labour market.

After exaggerating the number of jobs created last year, Zuma merely said that this year would see improvements in labour legislation to further promote workers’ rights and that the Department of Labour would review the sectoral determinations for agriculture, forestry, private security, and the wholesale and retail sectors. He said he expected the finalisation of the Employment Services Act, which formally establishes a public employment service and formally regulates the practices of private employment agencies and temporary employment services.

Apart from references to tweaking this or that law, Zuma said nothing about the inequalities in SA’s labour market. Of huge concern is that there was only passing mention of the national minimum wage, hidden in a reference to the mining sector. Zuma’s reference to reviewing sectoral determinations suggests that he thinks they, rather than a national minimum wage, will continue to be government policy on wages. This is despite the promise in the African National Congress’s election manifesto to explore the modalities of the introduction of a national minimum wage and the commitment the government made at the Labour Indaba last year.

Clearly, the government is burying its head in the sand. At present, nearly all the vulnerable workers covered by sectoral determinations earn below the median wage of R3,000 a month.

Zuma also did not mention that, at present, only 10.2-million workers are employed in the formal sector. Of these, only 2.4-million are covered by bargaining council agreements and 900,000 are covered by plant-level agreements only.

The wages of 3.5-million workers are regulated by sectoral determinations, and those of 3.4-million workers are not regulated at all.

Zuma also made no mention of the report by Statistics SA (Stats SA) a few days before his address, which exposed the shocking extent and persistence of extreme poverty, which greatly strengthened the argument for a national minimum wage.

Stats SA’s third “upper-bound poverty level” (UBPL) measures the income people need for essential items after meeting their basic food needs. It has “rebased” its figure for 2011 from R620 to R779 a person a month and to about R946 for last year, which is still a minimal amount. Based on this recalculation, the number of people living below this level increased from 45.5% to 53.8% — more than half of the population.

The new information from Stats SA on the UPBL has critical implications for the debate on a national minimum wage. Low-income workers do not just support themselves but, on average, have four dependants and in many cases even more. For a family of five, last year’s R946 would require the breadwinner, merely to save his or her family from poverty, to earn a minimum of R4,730 a month next year, or R4,966 if one adds an inflation adjustment of 5%. Yet most of the minimum wages in sectoral determinations are way below this broad minimum living level. Even some bargaining council agreements are below the broad minimum living level.

Recent strikes are an indication of how unsustainable it is that so many workers, even those covered by sectoral determinations — which are supposed to protect the most vulnerable workers — are living below this poverty line.

Yet nowhere in Zuma’s speech was the plight of the “working poor” or the unemployed dealt with. The government is still resisting demands for the outlawing of labour brokers. Despite the limitations placed on them in the amended Labour Relations Act, labour broking remains exploitative and perpetuates cheap labour. Zuma’s speech to the joint sitting of Parliament reflects how uncaring the government is about the plight of poor people.

• Machaba is a member of the United Front national working committee and a National Union of Metalworkers of SA shop steward.

 

Picture: GCIS – President Jacob Zuma listens to the state of the nation debate in Parliament this week. Opposition parties await his response on Thursday.

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