PAY inequality between top management and workers is the key driver of South Africa’s labour market instability and the reason for the rise in unprotected strikes, says Nedbank Private Wealth political analyst JP Landman.
The number of man-days lost due to strikes has averaged 3.4-million a year for the two decades of democracy.
The loss has fluctuated from less than 1-million to over 12-million in some years. The number of strikes rose exponentially when the economy grew faster than 5% a year.
Last year, 4.5-million man-days were lost to strikes, an increasing number of which were unprotected.
According to Mr Landman, inequality is the key driver of labour action.
“Is there a link between the considerable wealth created since the mid-2000s and the increase in strike activity? Could the much-vaunted theory of relative depravation play a role in this increase?
“Most people would agree that inequality is a serious issue in this country. We can expect severe tensions in our body politic in future years,” he said.
A study by management consultants, P-E Corporate Services, said that chief executives earned up to 52 times more than their most junior staff last year. Cosatu spokesman Patrick Craven said this finding was at the core of worker dissatisfaction.
“South Africa does have one of the highest levels of strikes activity in the world. Each strike is on specific issues, but there’s a common thread through all of them,” he said.
“It comes down to comparison — workers look at what CEOs get and what they get. South Africa is one of the most unequal countries in the world.”
In the past, strikes most often coincided with the wage-negotiations period, but more recently they have broken out despite wage negotiations being completed and outside of the collective bargaining process.
Dawie Klopper, economist and equity analyst at PSG Asset Management, said: “The economy can hardly afford that loss of productivity. The sad thing is that these losses cannot be recovered — for instance you’ve seen from the car industry strike there’s not enough capacity to make up these losses.”
Dawie Roodt, chief economist at Efficient Group, said South Africa lost more man-hours a year than most countries in relative terms.
“Lost production is in the billions. This can be converted into lost employment opportunities.”
Craven rejected the idea that strikes were having an irreversible cost on the economy.
“If it leads to a more satisfied workforce receiving a wage that better reflects what they do, this can be for the good of the country.
“A higher disposable income creates more demand for goods and services. Strikes themselves are not beneficial, but these are as much a responsibility for employers as for unions and employees.”