OBG talks to S’dumo Dlamini, President, Congress of South African Trade Unions (COSATU)

Interview: S’dumo Dlamini

What benefits could be achieved through the implementation of a national minimum wage?

S'DUMO DLAMINI: South Africa currently faces a trifecta of challenges that consists of high inequality, poverty and unemployment. We have one of the most unequal societies compared to other developing countries, with a large proportion of the population living below the poverty line and a high rate of unemployment that stands at around 35.6% (conservatively 25.5%). In assessing ways to confront these challenges, we strongly believe that one of the tools required is a legislated national minimum wage. It would provide some bottom-up relief to the plight of those at the lower end of the socio-economic spectrum. It would also strengthen the employment base through job creation. However, it should be introduced alongside subsidies for transport, health and basic amenities.

Sectoral determinations – the current minimum wages that vary by industry – should not necessarily be replaced across the board by a national minimum wage. Rather, a national minimum should serve as a shared basis for other sectoral determinations. Indeed, an outright comparison of public service and agriculture wages makes little sense without adjustments.

How could a national minimum wage negatively affect the economy, and how can this be avoided?

DLAMINI: An argument that is frequently advanced is the job loss potential of such a policy, citing the example of the agriculture sector a few years ago. Trade unions are likewise accused of protecting current workers at the expense of new entrants; however, this is untrue. The ratio of workers-to-dependents is high, ranging from four to 10 dependents per worker’s salary. A monthly wage of R5000 ($473.50) is simply not enough. There are many successful examples of national minimum wages and, as long as the workforce remains productive, retrenchment should not occur.

To have an effect on inequality and unemployment, a national minimum wage must be accompanied by the tempering of the policies that have skewed our present day economy. Currently 87% of South African wealth is consolidated in the hands of only 11% of the population. Without a shift towards radical economic transformation, any social interventions on the part of the government will simply create a welfare state. People do not need handouts, they want to be able to work and care for their families. A national minimum wage is the first step in that direction.

In what ways can relations between business and labour be improved in South Africa?

DLAMINI: The National Economic Development and Labour Council (NEDLAC), our social dialogue structure, has unfortunately been undermined in recent years. The senior leadership of the social partners need to take the NEDLAC seriously and do more than just send junior staff without mandates. What had the potential for social dialogue has degenerated into a talk shop. Although binding resolutions are not the ultimate goal, we should at least be reaching agreements on the scope of socio-economic challenges facing the country. To this end we must realign the NEDLAC’s work with its original purpose of discussion and consensus-building on socio-economic issues.

The most pressing issue that demands greater dialogue amongst government, business and labour is the National Development Plan (NDP), South Africa’s long-term vision for economic development. We believe that COSATU failed to successfully influence the National Planning Commission, the body where the NDP was open for consultation. As it currently stands, the NDP reflects the capitalist interests of big business, which seek to sustain the status quo rather than create new structures for building an economy based on the principle of redistribution. As representatives of the labour perspective, we strongly believe that certain sections of the current NDP, namely the economy and labour chapters, need to be further reviewed through renewed dialogue amongst South Africa’s social partners.