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  |  COSATU Speeches

Zwelinzima Vavi`s speech on organised labour`s perspective on employment equity and transformation

18 April 2013

Thank you very much for honouring me with an invitation to address this august gathering on such an important topic – how to complete the transformation of our society into one on which all South Africans are free and equal.

At a highly successful Conference on Collective Bargaining, Organising and Campaigns in March, we looked at the range of challenges we face as workers, one of which is the one we are discussing today - employment equity.

While the conference focussed on the overall crisis of poverty and inequality, delegates were quite clear that these are inseparable from the racial imbalances in the distribution of wealth and income which we have inherited from the years of colonialism and apartheid.

We still do not have a workforce or a wage structure that comes anywhere near to reflecting the demographic profile of the country, in which Africans constitute 78.9%, whites 9.6%, coloureds 9.1% and Indians 2.9%,

That is why COSATU has always supported the Employment Equity Act and other affirmative action policies, and insisted that they that must be enforced more urgently and systematically.

Racialised inequalities in income were exposed by the South African Institute of Race Relations, which, analysing data from Statistics South Africa, showed that in 2011 the median monthly salary for Africans was R2 380, while Coloureds earned R3 030, Indians R6 800 and whites R10 000.

On employment opportunities, the 12th annual report of the Commission for Employment Equity (CEE) for 2011-12 proved that we are far from reversing the discrimination in employment that we inherited from the days of apartheid. The report reveals what it rightly describes as the “gross under-representation” of black people‚ women and people with disabilities in key areas of the labour force”.

At the top management level Africans represented an even smaller percentage than the previous year - only 18.5% (down from 18.8%). Meanwhile whites at 65.4% are only slightly down from 68.1%, due to a small increase for Coloureds, at 4.8% (up from 3.9%), Indians at 7.5% (from 6.1%) and foreign nationals at 3.9% (from 3.1%).

We agree with the commission that it is “a matter of grave concern” that Africans at this level remained “grossly underrepresented with the year-on-year decline”. Although whites accounted for the highest number of terminations at this level‚ they also accounted for the greatest number of recruitments and promotions.

The gender balance also shows minimal progress, with males holding 80.9% of positions at this top level while females hold 19.1%.People with disabilities hold a minute 1.9% and even that contains the same racial imbalances.

At the next level down the picture is slightly better, but progress is still much too slow. At senior management level African representation rose over the year to 21.8% from 18.1%‚ coloureds from 6.1% to 7% and Indians from 8.2% to 9.6%‚ while white representation declined from 65.2% to 59.1%, which is still nowhere near the national demographics.

As the commission noted however, even at lower levels, where there are more positive trends, if current progression patterns continue, equitable representation would only be achieved “in the not so distant future”.

The report adds further ammunition to demolish the ludicrous assertion by former President FW de Klerk that “the main inequality divide in South Africa is no longer between blacks and whites, but between unionised and employed workers on the one hand, and unemployed on the other".

COSATU has already responded to the false notion of a divide between the employed and unemployed, when we said in a statement on the CEE report: “By far the biggest inequality is the gulf between a still mainly white and male capitalist class and its top executives, who form a small, rich minority, and an large overwhelming black working class majority, in which the employed and unemployed share poverty and share a common interest in building a far more equal society and economy".

The lack of transformation is not confined to employment and wages. It is reflected in our scandalous two-tier service provision in areas of healthcare, housing, transport and education. A still mainly white, rich minority can pay for top-class private services, while the overwhelmingly black, poor majority have to struggle with inefficient, under-resourced facilities.

On education and training, an earlier CEE Report, for 2010, observed that skills development and training remains biased towards whites, who command 61% of the skills development and training among those who are professionally qualified.

“It is evident,” says the report, “that private sector employers continue to invest more training on whites than on other population groups. If there was willingness on employers to empower blacks, it would have been evident in the training provided. This therefore suggests that employers are not utilising their training strategically to ensure that they empower the under-represented groups to ensure their upward mobility within the workplace”.

For all these reasons, the COSATU Bargaining Conference called for “a strengthened Employment Equity Act, which needs to introduce strict penalties for non-compliance”.

The problem however is inseparable from the broader crisis of unemployment, poverty and inequality. Transformation of the ethnic structure of our society will be impossible within the confines of an economic structure which perpetuates massive levels of unemployment, poverty and inequality.

When unemployment overall is standing at around 36%, by the more accurate expanded definition which includes those who have given up looking for work, and at 40% for blacks, racial equity in employment will obviously be harder to achieve. When jobs are so scarce, competition to get any job is intense, and those with jobs will fight harder to keep them if they know there is no alternative. It will be far easier to create more opportunities for the ‘previously disadvantaged’, when new jobs are being created than when employment is stagnant or shrinking.

The key to speeding up the escape from racially biased unemployment is to pursue policies for full employment and creating more decent, sustainable new jobs. To achieve this we have to build an economy based on manufacturing industry, so that we can move away from the inherited economic growth path which has been over-dependent on the export of raw materials.

That is why we advocate a new Economic Growth Path for Full Employment, and support the government’s Industrial Policy Action Plan and its infrastructure development programme.

Similarly, racial inequality in incomes cannot be narrowed unless we tackle the extent of South Africa’s poverty and its world-record levels of inequality, within, as well as between, racial groups.

A Global Wage Report by the ILO, analysing wage inequality from 30 countries in 2009/10, revealed that 33% of SA workers are in “low wage employment” - earning less than two-thirds of the median wage (R1 867) or in the case of the EU definition 75% of the average wage.

At the opposite end of the economy, the PriceWaterhouseCoopers Report (2010) on Executive Pay - even though it over-estimated the wages paid in the South African economy when it said: “The lowest paid workers have monthly salaries of around R3 500” - found the pay of executives to be 250-300 times that of the lowest paid worker. If we correct the lowest paid worker’s wage, the median executive pay gap ranges between 1 535 and 1 842 times the wage earned by the lowest paid worker!

The answer to this grotesque level of inequality cannot just lie in creating more black millionaires and more whites living in poverty, but a drastic narrowing of the gulf between those at the top and bottom of our income and wealth pyramid.

That is why we are campaigning for a national minimum wage, which would be an important first step towards greater equality and a springboard to drag millions of poor, overwhelmingly black, South Africans out of poverty.

A minimum wage would not alone address poverty and inequalities. It must form an integral part of a coherent wage and incomes policy, including comprehensive sectoral bargaining mechanisms - where workers will still have to battle to improve on that minimum wage floor - and a basic income grant to provide all South Africans with an income.

To demonstrate how such policies could work we are heavily indebted to former President Lula of Brazil, which used to be the world’s most unequal country until South Africa swopped places with them. He faced very similar problems and, in his second term of office, adopted policies very similar to those I am advocating today.

Under his administration, minimum wages played a key role in reducing poverty, unemployment and inequalities. Between 2002 and 2010, the national minimum wage increased by 81%. In the same period 17 million jobs were created. The proportion of formal employment in economy increased dramatically outpacing the informal jobs by 3:1.

Between 2003 and 2008 poverty came down by 20 million from 61.4 million to 41.5 million. And, of particular significance to today’s gathering, inequality was cut; the Gini coefficient, which measures inequality, fell from 0.57 in 1995 to 0.52 in 2008, and salaries rose from 58% of GDP in 2004 to 62% in 2009.

This is what we have called ‘a Lula moment’ or what the ANC has dubbed ‘the second phase of the transition’. That is what we need to achieve a radical restructuring of our economy, driven by a developmental state, to create more decent and sustainable jobs, a faster growing economy and a more equal society.

That in the long run is how we are going to finally put an end to the racist inequalities in jobs, incomes and service delivery.

But of course that does not mean we simply sit back and wait for that to happen. Here and now, trade unions have to fight every case of racial discrimination in employment, promotion, pay and working conditions.

Government must monitor and enforce existing laws like the Employment Equity Act more rigorously and bring offending employers before the courts, including those who do not even submit reports to the CEE.

Employers should work with government and labour us to create equity and fairness within their companies, and comply with all the laws to safeguard workers’ rights and a healthy and safe working environment.

And we must all declare war on the two-tier service provision, so that people of all races have equal access to the best possible standards of education, healthcare and public transport.

That is how we will complete the transformation of our society into one on which all South Africans are free and equal.

Thank you.

Patrick Craven (National Spokesperson)
Congress of South African Trade Unions
110 Jorissen Cnr Simmonds Street

Tel: +27 11 339-4911 or Direct: +27 10 219-1339
Mobile: +27 82 821 7456
E-Mail: patrick@cosatu.org.za