Political Analysis South Africa

Labour

Entry-Level Wages: Employers Will Replace Workers To Cut Wage Bills

Entry-Level Wages: Employers Will Replace Workers To Cut Wage Bills

The South African Federation of Trade Unions urges all its members and all other workers to throw their weight behind to National Union of Metalworkers of South Africa in their fight with employers in the Engineering sector. It is a life-or-death struggle for all workers.

NUMSA has quite rightly rejected the latest offer from employers who are demanding:

  • To implement a minimum rate of R20 per hour for new entrants to the sector, when the minimum is R40, which they say is because of the ANC’s National Minimum Wage policy.
  • To increase wages in terms of the minimum rate instead of what the worker is actually earning
  • NUMSA to recognize the Plastics Negotiating Forum as a chamber of the MEIBC because they want it to be excluded from the main agreement.

NUMSA has rejected this offer with the contempt it deserves and stands firm on its demands for:

  • A 15% in wage increase across the board based on the actual rate that a worker is earning, and not on the minimum rate.
  • Backdated increase from 1st July 2017
  • A two-year agreement.
  • The extension of the agreement to non-parties; this includes non-parties and Employer associations like NEASA and PCASA who fall under the MEIBC.

What makes this dispute so important is that the employers are not only refusing to agree to demands for increased pay but are demanding that NUMSA agree to demands that will cut wages for hundreds of workers and make working conditions worse.

It cannot be a coincidence that the engineering employers’ demand for R20 an hour for new entrants is exactly the same as the poverty-level national minimum wage (NMW) agreed at Nedlac. It proves how right both NUMSA and SAFTU were to warn the ANC that this NMW of R3 500 a month or R20 an hour would have disastrous consequences for workers. The engineering employers are showing us exactly why we were right.

This demand for a lower wage for new entrants is another variation of the youth wage subsidy in the Employment Tax Incentive Act, which was designed to subsidize employers who exploit young workers who are desperate for a job, with no obligation of either training or permanent employment after the tax allowance is no longer available. It encourages employers to replace older workers with new entrants so as to cut their overall wage bill.

The same applies to the engineering employers’ demands. NUMSA are correct to say that employers are lying when they say that those who earn more will not get downgraded. They could even face retrenchment if employers decide to replace them with new entrants.

If NUMSA were to agree to this outrageous proposal, then new workers will suffer poverty and exploitation, and the jobs and wage levels of those already employed will be at greater risk.

As NUMSA said about the NMW: “The capitalists now want the workers pay the price for their crisis, in which unemployment, poverty and inequality are all rising. 65% of South Africa’s wealth is owned by 10% of the population, 80% of whom are white. The payment of R100 million to Shoprite CEO Whitey Basson in 2015 puts the R3500 into perspective.”

South Africa workers moreover get back an even smaller share of the wealth they create than in other parts of the world. CEOs earn more than 500 times the per-capita gross domestic product. In the US, the figure is 300; in most of Europe, less than 200.

NUMSA is determined to fight this battle to block the greedy employers from implementing this poverty wage. But they must not fight alone. If they are left with no choice but to strike, SAFTU and the whole trade union movement must rally and mobilize its forces and flood the streets in solidarity action.

This is a struggle to protect the rights of all workers and their families, and to ensure a life of dignity for them. This is a time when the battle cry of  “an injury to one is an injury to all” must not only be loudly shouted but acted on. This is a battle we cannot afford to lose.

The South African Federation of Trade Unions (SAFTU)

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