Baleni calls for wage talks restraint

[miningmx.com] — COLLECTIVE bargaining on wage increases and conditions of service is always tricky, but it is going to be particularly interesting this year because of the low inflation rate now hovering around 3.5%.

Conventional economic theory states that any wage increase higher than the inflation rate must be followed by a corresponding productivity rise – otherwise the increase is not affordable, since it eats into the employer’s profit margin.

This is certainly logical, but it is often not applied in practice, especially in a country where the gap between rich and poor is considered the highest in the world and the dividing line between rich and poor is (still) strongly racial. Also, because of socioeconomic factors like educational handicaps, it is very difficult if not impossible to escape from the vicious circle of poverty – especially for someone born and brought up in the lowest remuneration level of the community.

Cosatu, which dominates collective bargaining in most industries, has for the past year or two also been busy reviving its campaign from the 1980s and 1990s for a living wage.

Last year’s public service strike strengthened the hold of the public servants’ trade unions on collective bargaining. As part of the process, they have also refused to sign a wage agreement for more than one year.

That’s why wage negotiations have just started in the Public Service Coordinating Bargaining Council – with a demand for rises of 10% and an increase of R1,650 per month in public servants’ housing subsidies.

This is by far the country’s biggest negotiating forum.

But at least trade union leaders in the public service are not as unapproachable as they were last year, partly because Cosatu’s trade unions want to finalise the wage negotiations as quickly as possible to focus on the municipal elections scheduled for May.

“We will be quite happy if we can settle for getting between 5% and 6% this year,’ one of the leaders in one of the biggest public service trade unions said.

On the mining front, negotiations between the Chamber of Mines and the three big trade unions – the National Union of Mineworkers (Num), Solidarity and Uasa – will most probably be a more important indication of what will happen in collective bargaining this year than any of the other negotiating forums.

SOBER EXPECTATIONS

Wage negotiations in the mining industry, which are held every second year, are always closely watched by other trade unions and used as an indication for wage settlements in other sectors.

A little over a week ago, the Num held a collective bargaining conference to discuss its strategy for these negotiations. General secretary Frans Baleni sketched a particularly sober picture of what negotiators should expect and how they must act.

Baleni told the several hundred delegates at the congress that he is concerned about the occurrence of violence during collective bargaining.

He also warned the Num against using wage negotiations to settle other problems, and using members as cannon fodder for such issues.

Negotiators should also beware of submitting long lists of demands to employers and using collective bargaining as a platform for leadership positions in the trade union.
And he warned against the practice of starting wage negotiations with excessively high demands, while everyone knew that the rate at which wage increases would ultimately be settled was considerably lower.

Using a graph illustrating wage settlements at gold and coal mines for the past three years in relation to the monthly and average inflation rates of every year, he illustrated that mineworkers should expect wage increases of between 4% and 6%, and no more.

However, he also devoted a large part of his presentation to the cost of health and especially the profits that the private health industry pockets.

A graph dealing with this showed that the return on capital in private hospitals rose from 12% in 1998 to considerably more than 20% in the past four years, while the cost of debt in private hospitals fell from 11% in 1997 to about 5% since 2005.

As we all know, public health services deteriorated scandalously in this period.
Baleni’s presentation showed this graphically too. He made his audience deeply aware of the suffering resulting from this.

The implications are clear. Trade union negotiators must be less concerned about wage increases in collective bargaining and devote more attention to socioeconomic commitments, like health.

The Num will only hand its formal demands to the Chamber of Mines late in April, or perhaps early in June, but they will definitely reflect these proposals by Baleni.

– The column first appeared in Sake24