Let's concede, for the sake of argument, that the protected right to strike is legitimate. If so, do our striking public sector workers deserve what they demand? Or are they worthy only of contempt?
Does anyone care whether striking teachers, nurses and other public-sector workers have a case?
They claim they earn too little, and deserve an increase of 8.6%. This is more than twice the consumer price inflation rate of 4.2%. That is before counting the R1 000 housing allowance they demand in addition to this boon. For a mid-ranking public sector worker, this "allowance" amounts to an additional 11.4% in fringe benefits, which would make the total demand, on average, almost five times the rate of inflation. When last did you see a 20% jump in your pay packet?
There is a good argument against the notion of protected strikes in the first place, because it grants employees the power of blackmail when they fail to reach a voluntary agreement with employers. Workers are far from weak in wage negotiations, despite being cast as powerless victims by those who champion unionism and collective action.
Let us concede the protected right to strike, however, for the sake of this argument. After all, it is the law.
If so, can anyone offer a reason why strikers shouldn't be denied, and the strike shouldn't be broken, by force if necessary? I can't think of any.
Let's start with the question of whether they are they worth the money they demand.
Considering the two most prominent striking sectors, health and education, the data suggests not.
A recent Newsweek survey, in which it uses public data to rank the world's best countries, places South Africa 82nd out of 100, behind such stellar locations as Iran, Nicaragua, Bolivia and Indonesia.
The country does surprisingly well on grounds of economic dynamism, which considers GDP growth, investment in innovation, and ease of doing business. Economically, it scores about six on a scale of one to ten, and ranks 22nd out of the 100 countries evaluated.
In terms of the political environment, which rates political freedom, participation and stability, South Africa is also well-respected, ranking 31st.
Despite these highlights, however, average quality of life is dragged down to a ranking of 88th by poverty and high unemployment.
Worst of all are a 92nd place for health, which is heavily affected by AIDS mortality, and and astonishing 97th place for education, outperforming only Ethiopia, Yemen and Burkina Faso.
Is this what we pay our teachers and nurses for?
One might argue that workers are not at fault for the policy failures of their employers, and that those have indeed been quite spectacular.
The notion of outcomes-based education, a delusional philosophy which has long since failed even in wealthy countries with far more resources, has had to be abandoned. It succeeded only in creating a new "lost generation" of children, who lack even modest skills in reading, writing and arithmetic. As a consequence, masses of school-leavers are wholly unprepared for further education or the job market by the time the government is done with them.
The murderous vacillation about a response to the scourge of AIDS, too, has taken a heavy toll, making South Africa one of the few countries in which life expectancy has gone against the global trend, as has plummeted to a mere 48.
As much as government policy is responsible for these tragic failures, they do not exonerate the people who are employed in order to deliver basic services to the people. In a private organisation, competition would have dealt harshly with such failure. Lavish increases of four or five times the rate of inflation would have been entirely out of the question.
Consider too that South Africa has a formal unemployment rate, by the most conservative measure, of 24%. Consider that a mid-level public sector worker already earns 40% above the national average income. Consider that the rest of the country, far from expecting increased pay, has had to tighten its collective belt in the face of tough economic times.
In this light, the demands of public sector workers appear truly outrageous.
Even if the demands were reasonable, however, the behaviour of striking workers has destroyed whatever claim they might have had to legitimacy for their demands.
With callous disregard for the rights and even lives, of others, they rampaged through streets, schools and hospitals. The news reports late last week became ever more nauseating. They interrupted operating theatres, blocked hospital emergency entrances, and interfered with the operation of neonatal and intensive care units. They intimidated, often with violence, those who did not participate in the strike, or who volunteered try to save lives by trying to keep basic, essential services going. They have caused untold damage to property, both private and public. They turned on alternatives to state-provided services, marching on private hospitals, schools, and even day-care centres. They have threatened the lives and property of the fellow-citizens, with callous disregard for both common decency and the law.
The behaviour of striking workers has been nothing short of disgraceful. They are a discredit to their professions, and to their nation. A mere month after the euphoric national pride generated by our impressive staging of the World Cup football tournament, people are declaring themselves ashamed of their fellow South Africans.
Not all striking workers deserve this level of opprobrium, of course. Many really do work hard to make a difference, in trying circumstances. Many work for modest pay because their service to others is a calling. They deserve our respect and admiration.
However, their peers have brought shame on them.
The decent thing for the unions to do is to concede that even if their demands once were reasonable – questionable though that is – they have now lost all vestiges of moral legitimacy.
It is too late merely to condemn unlawful actions on the part of members. Accept the wage offer of government and order members back to work. Try to regain some trust and honour by showing the citizens who pay the public servants that their service is worth the expense. Demonstrate that these workers really are committed to building a better South Africa, instead of demolishing what little remains of the crumbling façade of public education and healthcare.
Failing that, break the strike by any means necessary. Meet violence with force. Pay the private sector to deliver the services that the government couldn't deliver even before its employees decided that public service was too good for them.
As for the striking public sector workers, they deserve nothing but our contempt, framed in a letter of summary dismissal.
On the one hand, we recognise that the coal-face workers, the nurses and teachers have been harshly treated over time and do deserve greater recognition (aka pay), that their working environments and career development needs have been neglected, and most importantly, that a leadership vacuum at local and national level coupled with political interference has contributed to stagnation and apathy rather than resolution of these matters.
There are undoubtedly jewels among the dross, but we all have stories and personal experiences of off-hand and callous so-called service. To cap it all, to walk off the job and let people die has completely squandered any sympathy they might have had.
Their behaviour has been simply unacceptable, and for Government to say that no action will be taken seems on the face of it to be craven cowardice. Or perhaps we will see some action when the strike ends.
We still have children taught under a tree because they do not have a school. We have patients treated in totally unsuitable buildings because the DoH has not provided specialist hospitals. That we are still in that position after 16 years of mis-management by the deployed cadres is symptomatic of political and managerial failure and lack of will.
That perfectly good schools and hospitals are filthy and run-down is both the fault of all the wekkas in them who don't take responsibility for cleanliness and good order, and management who don't take proactive steps to ensure a clean and safe working environment.
we cut corners where we can. we cut our own income to the bone. we give our workers the minimum increases we can afford, and if someone resigns, we don't replace them. increases, bonuses and holidays are out of the question. all our friends and acquaintances who are also employed/employers in the small and medium business industry, are in the same position. times are very tough indeed.
at the same time we see how large corporations and government institutions are hosting and attending expensive, luxury parties and conferences, paying themselves huge bonuses and spending billions on world cup tickets.
this leaves us with 2 conflicting opinions. the one is that a government that squanders billions on unnecessary indulgences, should give their workers a decent increase. their argument that they cannot afford more, is insulting.
on the other hand, we are angry that while the many people who are not employed by government and large corporations, are constantly tightening their belts, and cutting back, and counting pennies; there are people striking because the increase that they are offered, and that we have not had for years, is not big enough.
and finally, it must be said that it is not the average nurse and teacher that was misbehaving during the strike. in the case of my son's school, the school was mobbed by striking 'teachers', not one of which teach at his own school. where they came from is still not clear. the people who care and give service and work hard, were working until they were forced to stop. they were threatened and intimidated, and their cars were stoned.
This overwhelming strike is actually a demand for service deliver in a different guise. Too many broken promises, fatcat living, uncaring demandodues in government, stolen money allocated for services, denials of corruption and no credible political opposition are the reasons for this rebellion against the government in the disguise of a strike. Yet these people are still liable to vote ANC!
ivo, the private sector simply does not have that sort of capacity and even if creating the capacity was sufficiently incentivised it would take years to create the management capacity and realignment of infrastructure to achieve
the free-market fundamentalist has only one tool: always a HAMMER, even though the solution asks for a concrete mixer
the solution lies in an extension of the thoughts touched on by ian shaw & peter van der merwe
One can easily make a start by putting education or healthcare contracts out to tender. You'll be surprised how rapidly the private sector can scale up when a paying customer is guaranteed. Once a system is in place by which the government pays for, but does not provide, a service, one can institute further reforms. By progressively cutting taxes and lowering subsidies, private citizens will be able to afford medical insurance and school fees, as private hospitals and schools begin to raise fees. Thanks to greater economies of scale, greater private competition, and the unavailability of "free" services offered by government, those fees need never reach the levels private institutions have to pay now, in order to cater for a small, wealthy elite.
Even in very rich countries, the public option often fails to address the needs of citizens, and results in rationing, waiting lists and substandard service. In our country the public option is a disaster. It's time to face reality, reject the ideological grounds for persisting with public healthcare and education, and try something new.
"Let us concede the protected right to strike, however, for the sake of this argument. After all, it is the law."
why is this a grudging concession on your apart? do we pick and choose the parts of the constitution (right to free assembly, free speech etc) that serve our interests and arguments best and disregard the inconvenient parts? this weak basis you start off with makes an already weak argument even weaker.
and i don't follow your maths in re 4x inflation increase, but that may be due to my own shortcomings. but assuming your maths is correct, let's concede that, one has to consider the fact there needs to be a structural adjustment in wages, particularly in the public sector. in certain countries teachers and the like receive free schooling for their children all the way up to tertiary, there are a variety of other precedents in this regard.
as 'examples'/evidence of failure of these public servants you cite OBE & HIV, i assume relating to teachers and nurses respectively. once again the argument is weak if not nonsensical, it's government (READ: the EMPLOYER) who has been responsible for the policies you cite as evidence of failures on the part of striking, undeserved workers
While I support the right to strike, there must be a corresponding right not to strike and to be able to carry on with daily life unmolested.
The behavious we have seen cannot be condoned. Joe and Jessie Public are in a state of fear and alarm. Strikers rampage though City Streets causing criminal damage. Non-Union workers try to enter buildings and sites and are physically intimidated and prevented from entering. If the perpetrators can't be arrested for any reason, then arrest the organisers and marshalls.
In this case walking off the job to leave hungry patients lying and in some cases dying in their own pee and faeces means the nurses and doctors who have done this have broken the Hippocratic oath they took as part of qualification, and therefore have no further place in the medical profession. They should not be allowed back.
The political dimension has brought us to this, with dogma taking the place of practical solutions fitted to the state of the nation. Our attention should be focussed on providing decent infrastructure and high-quality service provision for Health and Education rather than worrying about which of the E,C, or S-Class range of vehicles to buy, or which 5-Star resort will hold the next legkotla. Or rigging a tender.
@peter has put it very well.
The strikers are incensed by the depth to which the great and not-so-good have buried their snouts in the trough. As I understand it, and I stand to be corrected, the offer on the table is about equivalent to an increase of R300-400 per month.
That is roughly the cost of a bottle of wine the Minister for Luxury bought at the taxpayers expense during his taxpayer funded nine-month sojurn in a private suite at Nellies. No wonder they are angry.
As for making my argument weaker, I contend that it makes it stronger. It offers one more in-principle reason for rejecting the demands of striking civil servants; albeit one that they would not have considered, and which cannot be enforced without a change in the law.
My maths is simple: an increase of 8.6% is more than twice the inflation rate of 4.2%. A R1,000 housing allowance represents 11.4% of a typical mid-level civil servant's monthly salary of R8,800. That adds up to exactly 20%, which is more than four times the inflation rate. Of course, the exact multiple depends on actual salary packages.
I'm not sure what you mean by "structural adjustment in wages", but I presume you mean a significant increase, since you propose loads of free stuff. Not only do private citizens not receive such free benefits, but someone also has to pay for all of them. This is not a problem if people voluntarily choose to pay for services according to how highly they value them, as people do when they pay private schools for an education, or private hospitals for healthcare. It is, however, a problem when the services are inadequate, and the taxman can only be extort payment from the public by legal force.
I addressed your final point in the column. If the company you work for fails to deliver services as a result of management's shortcomings, and customers desert it for a competitor as a result, workers can't claim the right to continued employment and pay from the failed company. The company as a whole takes the responsibility, and the only alternative for workers is to find employment with employers who do prove themselves capable of providing jobs producing goods and services customers will pay for. Besides, by leaving newborn babies, vulnerable children and ill patients to fend for themselves, and resorting to violence and intimidation, public servants have shown that they lack a sense of responsibility themselves. They have given up the moral legitimacy to blame policy makers for their failures.
Once again, this underlines the principles at the root of all my arguments: that government services are at best inefficient, and often ineffective. From the fat-cat planners at policy level, down to individual civil servants who show callous disregard for the public they are meant to serve, the system is riddled with terminal failure.
As for whether we can afford a libertarian economy, I'd argue that even rich countries cannot afford a welfare state. The poorer a country is, the less it can afford socialist measures (which is what the euphemism "developmental state" implies). Far from arguing middle-class notions, the poor and unemployed -- who are sorely neglected in our "developmental state" -- stand to gain the most from economic liberty.
And the competent will find employment elsewhere. Why the competent chose to join unions in order to bargain collectively with the incompetent is beyond me, but even if they get fired as a result of their association, they will form the core of the private-sector alternative that will emerge once the state stops trying to offer failing social services for free. As Etienne Marais pointed out, a lot of private-sector capacity will be required. Hiring those with good performance records out of the civil service will make a good start.
your argument that that poor/er countries must essentially embrace smaller governments ignores economic history and realities - it's a very bourgeois argument, the "if we (read: middle class) can do it, so can they" argument".
i think we're informed by differing starting points, i think you overestimate the capacity (and benevolence) the private sector and you perhaps you think i over-estimate state's capacity to be functional.
1) If you look again, Ivo is AGAINST the right to protected strikes, not for it - there is no incongruity there.
2) Re: India & Brazil. I think you will find that in these two countries, as in all very poor societies, there is a very large informal sector that avoids wherever possible the oversight (and therefore the "protection") of government, and is thus much more liberalised and efficient than the formal sector. This small-scale flexibility is how people who are formally unemployed survive. It is my position that the regulatory environment set up by a government overly intent on "protecting" the worker acts as a very effective barrier that prevents economic activity in the informal sector from developing into formal businesses which go on to become larger-scale employers, and thus does more harm than good.
3) Re: Scandinavia. there is a good article (http://mises.org/daily/4146) that reminds us that a country's economics are not necessarily just a reflection of its current policies and circumstances, but those of its past. We should remember firstly that these countries (particularly Sweden as a neutral in WW2) became extremely wealthy BEFORE they implemented the bulk of their welfare-state systems, and once these were fully in place, their economies started to stagnate. They addressed this problem through liberalisation - tax and welfare cuts, reduced regulation and encouragement of the private sector. Secondly we should recognise that despite their socialist tendencies, the Scandinavian countries are extremely highly rated in terms of both economic freedom and ease of doing business.
4) The private sector's capacity is limited only by the opportunities for it to be useful - at an economically sustainable price (something that the government doesn't need to consider).
5) The state has plenty capacity to be functional, but its motivation to do so efficiently is practically negative because it is essentially using somebody else's money to buy popularity, and its capacity is stunted because all of its actions have political consequences. This leads to the quagmire of conflicting interests, bureaucratic ass-covering and zero accountability with which we have become so familiar under the ANC's yoke.
scandinavian countries ARE socialist AND efficient. i'm not saying otherwise nor making any commentary about the genesis of this, you seem to support this obvious observation
in re private sector capacity, even if i accepted your arguments (yours and ivo's) that the private sector has the ability to effectively replace the state in key sectors like health and education, i would still find that overall argument problematic. usually that argument - the argument for less government (particularly here in SA), is code for maintaining an otherwise undesirable status quo. in sa it really is a non-negotiable that the state should be ever-present in key socio - economic sectors like education and health. now if you're making the argument that the state, in it's ubiquity, should be more efficient then i'll join you in that argument. but don't confuse the two arguments.
A protected strike is one where the strikers are protected by law from being dismissed. The strikers are free to strike (which is fine) but their employers are not free to fire them as an option. This is where the line is drawn between negotiation and extortion. It is negotiation where an employer has the option of firing and replacing staff (with all the uncertainty, time and training that involves) as a negotiating tool. It is extortion when the striker can disrupt the employer's business indefinitely without fear of dismissal. Freedom is always balanced by responsibility and consequences, whether it's free speech where a libel suit is a possible consequence, or if it's striking where dismissal is a possibility.
Regarding Scandinavian socialism. Firstly it was their wealth, accumulated under far more liberal policies, that allowed them to implement socialist policies in the first place. Secondly, their socialist policies served only to stagnate the economy, forcing them to liberalise. Thirdly, it's a mistake to equate effectiveness with efficiency: effectiveness gets the job done, whatever the cost. Efficiency gets it done for the least possible cost (in either time or resources or both). With this in mind, you must remember that Scandinavia is a wealthy region where poverty is the exception rather than the norm, and in such circumstances, with social services being a relatively slight strain on the national income, it is not difficult to create an EFFECTIVE social services system. That does NOT mean it's efficient.
Regarding your asserion that there is an undesirable status quo that only government can change, it is my position that you are diametrically wrong (and paranoid too). However, this is a long and involved subject on its own, so let's leave it alone for now :-)
It goes to the fact that in 2004 we started to shrink but managed to keep our heads above water. Salary increases literally amounted to 3% more take home pay than the previous year. Staff numbers, 19 permanents and 24 casuals, remained steady at 43 until 2007 and the introduction of the National Credit Act. A disaster soon to be followed by the Consumer Protection Act.
A mere three years later we now number 6 permanents and 6 casuals. Salary increases are down to 2% year on year and cars are now 9 years old. The future says we will all be unemployed by this time next year and their is nothing we can do about it. This has all come about largely because of indiscriminate imports that have caused the closure of too many factories and the National Credit Act.
What has all this got to do with strikers you might well ask? Let's make strikes illegal by privatizing government services and only award increases when the job is well done. More importantly, let's measure politicians on the successes they achieve before paying them their inflated stipend. The measure must be that their department receives unqualified audits from independent auditors that are changed bi-annually.
Every day we see the poor knocking on our door for a hand out because they are unemployed. The right to strike is not a licence to attack others.
I think that your story demonstrates where the Goverments greatest failure has been. They seem to have the impression that SSME companies are just smaller versions of big business. Emphatically they are not. What mght be a minor irritation for Anglo, is a major headache for SMME guys and gals.
In SA SMME businesses are shouldered with a bumf filling and legislative burden that would choke a horse. The financial environment is to put it politely, not friendly, and the legislative burden to be followed in staff matters is far too prescriptive, detailed and intrusive.
I have run a small business for the last 15 years or so, purchasing it from teh previous owner as he retired. I have deliberately shrunk it from a core staff of ten, to one, me. All non-core functions especially finance and legal, are outsourced. Where possible I have moved operations onto a digital or internet platform. I do not respond to Government tenders, because even if I win, I cannot sustain my business while the department concerned decides to take eighteen months to pay me short, and still take prompt payment discount.
It is abundantly clear that Government does not understand the needs of SMME businesses. This is particularly sad since around 80% of economic activity in most countries comes from companies with less than 50 employees.
We will not generate economic growth and jobs by expecting another Anglo to pop up. Economic growth and the jobs that follow will come from the entrepreneurs in the SMME sector.
We may then be able to tackle the overstuffed public sector and move many employees from being consumers of resources to generators of resources in the SMME sector.
Can either of you guys explain what scares you about the Consumer Protection Act?
What I've read about it seems long overdue. If you sell defective crap the customer can ask for his money back. Speak plain English, not sly gobblygook to trap the unwary. On the face of it, honest business folk who are out to deliver genuine products and services without tricking people into shouldn't have any trouble at all.
Please tell me what I'm not seeing here.
Whilst I agree that consumers may from time to time be fleeced by companies delivering defective products, the most effective solution to the problem remains the consumer himself - by voting with his feet. Consumers will not continue to support a company/service provider if they are not delivering to expectation.
Contrary to what you may believe, the introduction of legislation will be a hindrance to those companies that are delivering high standards of quality and service. Compliance is costly and simply absorbs resources that could be better allocated elsewhere.
Ivo,
I agree with your views on protected strikes and most of the other points you make in both the article and the comments section. The trade unions have become somewhat of an economic monster in South Africa.
Some suggest that if government excess (motor vehicles, entertainment etc) were to be curbed it would free up enough cash to allow for increased wages. They have got it wrong. Excess spending should be cut, yes, but you cannot simply 'transfer' the funds. Excess spending drains available resources, but the point is that those resources are already limited!
The government can attempt to 'buy peace' and succumb to the unions demands but the risks are enormous. They risk harm to the economy in the long term, and the very same people's jobs the unions are striking over. The reality is that these strikes don't change anything for the unemployed. In fact, they make things worse, and that is something the government needs to appreciate.
Government cannot pacify the unions without this being at the expense of the umemployed masses.
Ho-hum. The old "buyer beware" argument from the house of social darwinism. What I never get about that one is why it should only hold for consumers being ripped off by business? If that logic is applied to all of us equally then I should be able to pay you with a rubber cheque and if that's not to your expectation, just never trade with me again.
Would that be okay with you?
As it happens, I do some moonlighting for an outfit that helps companies comply with the plain language requirements of recent legislation. I pointed out in the column that I agree with the intent of that portion of the law, but first-hand experience underscores the fact that companies are incurring significant compliance costs that will be passed on to consumers.
What you are missing is the fact that a retailer does not make the goods they sell and generally stop selling goods that can harm their image.
Now along comes a piece of complicated legislation that will be misunderstood by consumers. This is because SMME businesses have to get the boffin's to explain to them the consequences of is. Urban myth is already running rampart and I have had consumers telling me that they are bringing back merchandise, for a full credit, because the hardly use it or that it is now faulty and the warranty period, generally 2 years, has expired.
It is the misconceptions that is being created by this legislation that is scary. The National Credit Act has already caused confusion amongst the poor. They believed this Act will protect them should they no longer be able to pay and they "register" to have their debts reviewed.
This is of course far from the truth as they have to adhere to a restructured repayment plan. This, coupled with the fact that they can no longer access credit, is never been explained to them.
Then also the rate of interest is far greater than it ever was under the old HP act. Effectively poorer consumer have always relied on the fact that retailers are not quick to bring legal action should they fall behind in their payments. Our average consumers takes 29 months to settle a 24 month contract.
We only added interest on arrear payments at the rate of 12% per annum. Now consumers pay up to 30% per annum on arrear installments because that is the dictates of the NCA . Previously HP deals, on household goods, were only allowed for 24 months. These days we see advertised deals for 30 to 36 months and that means that the consumer will pay a lot more for the goods than under the old system .
The NCA, after three years, remains a piece of legislation that confuses consumers and in many case, retailers as well.
Bottom line is that the old Credit Agreements Act (HP for short) gave consumers all the protection they needed. These new Acts will kill the retail market because of the fact that it will never be explained properly to the consumers.
Then of course their is the fact that all this new legislation cannot be policed by the crumbling legal infrastructure.
Allied often with the inability of Government to provide proper guidance for compliance, and for easy and accessible methods of submitting forms and the inevitable fees for complying. CIPRO is a prime example of how the Public Service can fill the arteries of commerce with cholesterol.
(It's surprising that while most Governments are spectacularly inefficient, SARS seems to be working well. Strange that, eh ?)
The typical SMME owner spends evenings and weekends doing all the BS Government requires because after all, the day should be when you actually commit business and earn money.
However, having said that, I think than Brendan has made some very valid points. I see ways in which the Act will benefit consumers, by ensuring that there is accesible redress for shoddy workmanship and poor quality products.
That's based on falling property prices and other barely tangible macro-economic factors (like rising mineral prices, perhaps) that have no impact on the common workers' livelihood whatsoever.
For one thing, the reality of the middle class is that they face a minimum 10% rental escalation annually.
The lower class has seen the actual cost of living sky-rocket in the last year by at least 20%. (Meat, staples such as bread, maize, sugar... fuel, and even taxi fares. And let's not forget the so-called luxuries such as booze and tobacco.)
Talking about a 4.2% inflation rate just shows complete ignorance of the reality on the ground.
Inflation figures are deliberately skewed and the real cost increases are hidden by those who seek to paint a rosy picture. The rate of inflation, in my opinion, should be calculated by the cost of keeping body and soul functioning. The jump in electricity, property rates and health costs together with food price increases are really the only factors that should be taken into account. The rest is just smoke and mirror stuff that no one believes.
Is it any wonder that no one has respect for leadership anymore?