Numsa General Secretary Irvin Jim’s Input in the Jobs Summit, NUMSA National Jobs Summit, Johannesburg, October 26 2011:
”Exploitation Divides, Decent Jobs Unites – Smash Capitalism!”
The leadership of Numsa, Leaders and guests from our ANC led Liberation Movement present, Employer representatives, Government and all invited guests representing various organizations present, Fellow Numsa delegates from all the sectors Numsa organises Members of the media present,
A. the Job Summit
1. the National Union of Metalworkers of South Africa – Numsa – has taken a conscious decision to convene this Job Summit, as a logical follow up of its nationwide Jobs Summits soon after the 2008 Numsa National Congress, to deal with the social catastrophe of unemployment ravaging our country.
2. it is now a well established fact that South Africa is in the vicious grip of the triple crisis of grotesque inequalities, mass unemployment and national poverty. Anyone who denies this has either been smoking something funny, or does not live in South Africa!
3. We have invited all of you so that we of Numsa can share our views with you, so that we can listen and learn from you, and hopefully together, we can start to appreciate what has been done, what is being done, and what needs to be done, urgently, to address the triple crisis of inequality, unemployment and mass poverty which is the greatest threat to our 1994 democratic project in South Africa today.
4. allow me to join our President of Numsa in welcoming all of you to this important Summit, and let me assure you that we at Numsa will value all of your contributions in the national efforts to address and resolve the triple crisis.
5. South Africa’s future, the future of our children, depends upon how we, all of us in South Africa today, will respond to the catastrophe being made by the triple crisis of inequality, unemployment and mass poverty in South Africa.
6. While the triple crisis has its historical roots in our past, a period of more than 360 years of manmade and consciously crafted inequalities, socially engineered unemployment to drive down wages especially of black people in general and Africans in particular, and the resultant mass poverty among the millions of black and African people, today, the global crisis of capitalism threatens to not only deepen this crisis, but to lay the basis for long term and sustained social instability in South Africa – unless we act as a nation, swiftly, decisively, to resolve this crisis!
B. What has been our experience for the past seventeen years?
1. Numsa wants to put it on record that the challenge of this Job Summit is not only to deal with both the direct and indirect negative impacts of the horrible social and economic policies of our colonial and apartheid past and the global crisis of capitalism which we must deal with, but we reckon that this Summit must sober up and appreciate that since the adoption by our own government of the current macro-economic framework policies, these policies have simply worsened and deepened our crisis!
2. the post 1994 macro-economic policies have laid the basis for accelerated de-industrialisation and job shedding; we at Numsa hold the post 1994 macroeconomic policies responsible for deepen inequalities, unemployment and worsening the explosive levels of poverty in South Africa today. We challenge anyone to persuade us to reckon otherwise.
3. the Gear Strategy Framework led to massive job losses across various sectors of our economy. this was the case during the boom period centred on a casino economy of financial speculation. it is extremely hard to know why some in the ANC government continue to champion the now globally discredited neo-liberal economic policies we adopted in 1994.
4. Today we know that the pace and extent to which we have liberalized trade post 1994 have really ruined our manufacturing capability and we have nearly ruined our national potential to industrialise by allowing cheap imports to replace local manufacturing.
5. Our pursuit of inflation targeting, maintenance of high interest rates, removal of exchange controls; in other words fiscal and monetary policies whose agenda favours or privileges financial capital at the expense of manufacturing capital directly ruined our manufacturing capability and potential. We are now reaping the benefits through mass unemployment and poverty!
6. We have done nothing significance since 1994 through our macroeconomic policies to dismantle the dominance of the minerals energy complex in our economy and society.
7. We have lost the opportunity of the immediate post 1994 political environment to transform, fundamentally, the minerals and energy complex, a role that could have been quite easily performed by our government by simply regulating so that all our mineral endowment are really diversified and beneficiated.
8. We instead chose to become victims of capitalist imperialist globalization propaganda championed by the West, in particular by the United States of America, where basically we were told that government has got no business in business: it must allow markets to drive development.
9. the attack on the role of the state in the economy led to a larger debate about the developmental role of the state and the need for the state to intervene in the economy.
10. But such debate was somewhat sterile as already key strategic companies that were traditionally in the hands of the state were already privatized.
11. with such a critical input in the economic value chains as the likes of Arcello, Telkom, Sasol, all were privatized and are now charging South African according to market import parity pricing. this approach accompanied by the withdrawal of import substitution constituted a direct attack on jobs and job creation.
12. at the point of production companies adopted Japanese new management techniques of continues improvement, Championing Kaizen under the slogan of competitiveness. Indeed companies reduced costs on a continuous basis.
13. As labour costs became the target many jobs were lost. Companies restructured their operations, outsourced what were defined as noncore, permanent jobs and workers better benefits and conditions were presented as a threat to the future of industries. Precarious work or labour broking system was introduced.
14. What our country failed to deal with was to fundamentally alter or address the fundamental issue of ownership and control of South African economy – meaning the restoration of the basic wealth of the country to all the people as a whole. We failed to address the property question in South Africa.
15. We have not implemented the fundamental demands of the Freedom Charter: mineral wealth, banks and monopoly industries as demanded by the Freedom Charter still remain in the exclusive hands of a tniy white male minority. the commanding heights of the economy are not in the hands of the state. All of this is very relevant today if we are to change power relations in our South African society and resolve the triple crisis of inequality, unemployment and mass poverty.
16. allow me to cast your mind back to the Numsa National Jobs Summit which we convened in March 2008. together with other national energies, that led to government adopting the South Africa’s national response to the job crisis. We raised the same issues then, as we do today, against the capitalist neoliberal orthodoxy which has today been global discredited.
17. the reason we continue to remind this Summit about this painful and dreadful past is because our country despite the promise for a new growth path, its developmental trajectory continues to be embedded in these failed macro-economic frameworks. None of the targets of Gear were met. at Numsa we demand an immediate and radical shift into a completely new growth path that is job led, promotes equality and directly attack poverty.
C. where are we today?
1. We are saying all this because in nearly all our sectors we are confronted with ticking bombs where basically we could completely lose our manufacturing base. such conditions are noting but breeding grounds for all sorts of primitive forms of accumulation, crime, corruption, and worse forms of working class exploitation where new modern slavery will be introduced using the triple crisis of unemployment, poverty and inequalities as a solid bases for a new accumulation strategy of exploiting the working class and the poor.
2. the bosses and the liberal media under these conditions champion a consistent capitalist class paradigm that seek to win over the public to accept that starvation and slave wages and sweat shop conditions are a necessary path for growth and development in South Africa today.
3. further, we are now being told that society must be made to know that the lives of first post 1994 generations of workers with social wages and better conditions it’s time is over; the new generation of workers must be made to accept that it they must lower their expectations. it is time for harder labour, poor working conditions and mean bosses!
4. That is why there is such a resistance to ban labour brokers, that is why there is a call to cut wages by half or the talk about wage freeze, instead of giving young people quality education and to create quality paying jobs: no that is not what has been proposed and done, no, that is not the route to go! instead we are told that we must champion the youth wage subside! why? Because there are too many people who do not have work. Numsa really rejects such a cheap and deceptive response to complex challenges.
5. Numsa thinks that there is a responsibility for both government and business to defend existing jobs and to create new decent jobs and the role of labour is to lead such a process.
D. the role of government
1. it must immediately cut interest rates and bring back capital controls. this would go a long way to create employment and jobs in the country as people with money will invest in productive sectors of the economy.
2. Government must intervene by weakening the current overvalued currency. . In addition Goverment should put a tax on small term capital inflows, we must remind all of us that last time we had a competitive exchange rate it was in 1994 and unemployment was at 9% .
3. Government must regulate and set up standards of the type and quality of products that are allowed in the country. Measures to promote localization must be put in place.
4. Government will have to increase tariffs across various sectors of the economy, and stop the current dumping by China which is destroying jobs.
5. Government cannot continue with a macro – economic framework that is not working. it is time for government to be bold and intervene in the economy.
6. Government must champion localization through a very firm approach of making sure that government, SOEs and private industries supported by tax payer’s money procure locally to drive localization and to create employment.
7. Rising electricity costs are having a huge impact on electricity-intensive industries such as foundries and car manufacturers. As we know, the National Energy Regulator of South Africa (NERSA) approved Eskom electricity tariff increases of 24,8% for 2010/2011, 25,8 percent for 2011/2012 and 25,9% for 2012/2013. These increases are devastating for our sectors. Rising energy costs are crippling many foundries; a sector that directly employs between 12 000 and 15 000 workers. As many comrades would know, the metal casting industry is one of the most energy-intensive sectors in manufacturing. Metal melting generally takes up a significant part of a foundry’s energy consumption. the melting stage in a foundry uses 40 – 60 % of the energy input. this consumption does not include the heating of ladles and furnace linings. this conference needs to talk about the effect that the rising electricity tariffs on jobs.
8. it is a pleasure to announce that as union we are taking steps to deal with this issue of rising electricity costs and its impact on industry. Last week as union we launched a Research & Development Group (RDG) on Energy Efficiency. this is a research group made up of our members from Eskom and from energy-intensive companies such as BHP Billiton, Assmang, Arcelor Mittal, Xstrata and Scaw Metals. the brief of this worker research group is to develop a framework for NUMSA on how companies can reduce their energy costs through workplace-based energy efficiency programmes. A draft framework on union-involvement in energy efficiency programmes will be tabled at the December Central Committee of NUMSA.
9. but employers must do their bit and stop using the increase in electricity costs to downsize and retrench. Many of our companies have no energy efficiency and energy-saving programmes. this is despite the fact that there are incentives and loans for programmes aimed at reducing energy costs. just last week ago, the Industrial Development Corporation (IDC) with the backing of German development bank KfW has officially unveiled a R500-million fund – Green Energy Efficiency Fund (GEEF). the fund will lend energy-intensive industrial sectors at prime less 2% over a maximum tenure of 15 years for projects which seek to promote energy efficiency. the loans will come in tranches of between R1-million and R50-million. Employers from our sectors must utilise these resources to reduce energy costs and adopt energy efficiency programmes.
10. there is a need for a decisive intervention on electricity tariffs both for communities and industries in that the current tariffs must be dropped to ensure that business are viable and communities can access such an important basic domestic and economic need.
11. Treasury department must ensure that we ban exportation of scrap metal and we should be imposing heavy export tax both on scrap metal and on our minerals export. such a stance can only be about champion localization.
12. We must bring back supply side measures, and deal with matters of import substitution in a way that solidifies our manufacturing bases because without a solid manufacturing base South Africa has no future.
13. where government has given support to a particular industry/sector, such support like such as the current APDP to the motor industry must be accompanied by well crafted and solidly implemented conditionalities.
14. it cannot be correct that OEMs benefit out of the APDP while it remains very simple for them to push the component sector out of business by squeezing them, calling for cost cutting with absolutely no regards for benefits and conditions of workers.
15. As if this was not enough some OEMs have guts to take a decision to source components in a company that has absolutely no local content. it is alleged that companies like Toyota SA, Ford Motor Company, Vwsa part of their plans are to source components from an Indian company called Mother Son, a company that is heavily subsides by the state in India.
16. the state must be the employer of last resort. this means it must intervene in the economy, tax the rich more, redistribute wealth, and use the tax it collects to create employment.
17. Numsa takes the view that despite concrete measures that government must take to reverse the negative and perilous trend of the job bloodbath, if plant closures continue this will directly be responsible for extremely high levels of de-industrialization which we shall never recover from
18. Government must prioritise infrastructure development and go away from the current over tendering system but government must employ workers directly and pay them a living wage. this would lead to the creation of many decent jobs.
19. Numsa believes in the nationalization of the commanding heights of the economy. the current overconcentration and monopolisation of wealth on one hand, and mass concentration of unemployment and poverty on the other hand will inevitably lead to social turmoil.
20. there is a need in the interest of our own development that mines and key strategic companies like Sasol, telecommunication, and Arcello-Mittal are in the hands of the state. there is nothing new or abnormal about this – many governments elsewhere own companies.
E. the role of business
1. Companies’ enterprise development plans must address issues of demographics, affirmative action, and employment equity, procure local and increase local content by at least 70 % or with clear targets.
2. South African companies and multinationals cannot continue using their sourcing methods and strategies to undermine jobs. instead of sourcing locally they import components despite the fact that there is local capacity to supply their needs. this destroys jobs. it must stop.
3. Companies must not use the global capitalist crisis and the triple crisis of unemployment, inequality and poverty to ruin benefits and conditions already secured by workers.
4. Companies must desist from making illogical, inhuman and unsustainable demands on workers such as cutting workers wages by half. such demands against the backdrop of the apartheid wage gap in South Africa are a threat to national peace and stability. We all must know that in South Africa:
a. the bottom 50% of the South African population which is largely black and African lives on 8% of national income, and the top 50% lives on 92% of national income.
b. the top 10% of the rich accounted for 33 times the income earned by the bottom 10% in 2000.
c. the top 5% earners who are nearly all white take 30 times what the bottom 5% earners take.
d. In 2008 each of the directors of the top 20 listed companies on Johannesburg Stock Exchange (nearly all white males) earned 1728 times the average worker; in the US the CEO pay in 2008 was directors there earn 319 times that of an average worker.
5. thus playing games by lowering wages of ordinary workers is equivalent to declaring class warfare on such already poorly paid workers.
6. some companies set targets for the component manufacturers or suppliers demanding that they must cut costs and they give them completely unrealistic targets. some even disarm both component suppliers and Numsa by saying that in their global sourcing strategy they can only be supplied by a global supplier on a particular cost. this must stop.
7. Numsa and employers must work together and speak in one voice and convince government that business can create jobs if government intervene in the economy by stopping cheap Chinese cheap imports.
8. We should be giving government a list of products that we can manufacture in South Africa and why they should not be imported.
9. Numsa and the Auto industry employers must jointly approach government and call for an increase on tariffs, and the only way of addressing the fear of retaliation is to convince our own government in particular and the European Union that in the light of the global crisis of capitalism and the triple crisis of unemployment, poverty and inequalities our country does need to be allowed to increase tariffs for a period of five to six years, and such an action should not make our Auto industry to lose its 10% preferential duty within the European union countries we are trade with.
10. Employers and Numsa in this job summit must be practical in explaining what mineral resources are available in the country, and if they were to made available to the economy they will grow existing industries and help to build completely new industries. this remains very vital if we take into account that countries that survived the global crisis of capitalism are those countries that have championed manufacturing where everybody agrees that manufacturing matters.
11. Numsa and employers must identify across all our sectors the weakest links in the chains that lead to destruction of factories and in particular areas where it is government’s duty to ensure that there is no dumping of products that ruin both our manufacturing and industrial capability.
12. We of the view that both Numsa and business must ensure that government’s mandate for DFIs must be about driving and defending jobs, ensure job creation for instance it cannot be correct that a company like Scaw Mittal South Africa cam be sold by Anglo American like any other commercial transaction instead of the country saying we cannot lose such a strategic asset if manufacturing matters.
13. If the fundamentals for promoting job led growth and saving our industries are in place, we cannot have a situation where the IDC and DBSA get constrained because of their mandates. We should from this job summit be calling on government to make an urgent intervention to save Scaw-Mettal with an intervention of both institutions while government must still review the mandate of FDIs to be skewed towards manufacturing and industrialization.
14. Business and government must take seriously the potential to grow real and decent jobs in the so called Green Economy, and pay attention to global and national efforts at energy conservation and stopping global warming. not doing this will simply deepen our crisis. Since our last Jobs Summit we have been making calls on how government infrastructure programmes must be used to build local industry. While there are talks at NEDLAC about procurement regulations, we find it unacceptable that in the Department of Energy (DoE) tender for construction of renewable energy plants worth $11 to $12-billion, the way the bidding documents are written is such that 30 points out of 100 in the evaluation of bidders that is meant for local content and local manufacturing is likely to be in the construction phase of wind farms and solar parks. the solar panels, turbines and wind blades will all come from overseas. As NOBs, we are seeking a meeting with the Minister of Energy to address the matter before adjudication on the bids is done in November.
F. Conclusion
We at Numsa are confident that if we take the measures outlined above, an seriously consider the views of all key economic and social players in South Africa today, and demand of our government to implement the Freedom Charter, South Africa may resolve its triple crisis!
Irvin Jim Numsa General Secretary 26th October 2011.
Issued by NUMSA, October 26 2011
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