SOUTH Africa is being held to ransom by trade union leaders. Their actions imperil the economy. The labour aristocracy believes — with justification — that it can behave as it pleases with impunity. The culture of endless expectancy, assiduously cultivated by union bosses and aided by captains of industry ever willing to capitulate, will take us apart.
In May, Labour Minister Mildred Oliphant revealed that a total of 17.3-million working hours were lost last year to illegal or unprotected strikes. Her department recorded 99 strikes, of which nearly half were illegal or unprotected. Of a total of 118,215 workers involved in these, 100,847 (85%) were in the mining sector. It is an industry out of control.
The country is under siege from a battalion of strikers: car workers who are members of the National Union of Metalworkers of South Africa (Numsa) have been on strike for nearly three weeks.
They have won increases so far out of line with inflation that it beggars belief. The cost to the sector has been enormous; the damage to its future and to the reliance placed on it by the global industry may be incalculable.
The gold mining industry has experienced a strike that has now petered out, but which has severely damaged companies already in peril from rising costs, poor productivity and a low bullion price.
Gauteng and Johannesburg were plunged into crisis by the totally unexpected and unprotected strike action by technicians in City Power who downed tools in protest against the introduction of a shift system.
Allegations surfaced of sabotage by some technicians of electrical substations, and stories appeared of incredible overtime payments totaling more than R1m a year in one case. City Power’s management has a lot of explaining to do, but nothing excuses sabotage that held one of the most important African cities to ransom for up to four days in some areas.
Members of the South African Transport and Allied Workers Union at SAA Technical, the maintenance division of the state-owned airline that is continually bailed out by taxpayers, also went on strike, once again for pay over and above inflation. Another big bail-out for South African Airways is clearly on the way — in addition to the R5bn granted earlier this year. It seems there is no end to the lies we are told by politicians about this sacred cow.
Temporary workers at the Post Office in Gauteng walked off their jobs to support their demand to become permanent employees, all as a direct result of the Congress of South African Trade Unions’ campaign against labour broking.
Now we are told that petrol pump attendants, members of Numsa, are on strike for more pay.
It is possible, of course, that they’ve forgotten that motorists are perfectly capable of filling their own cars, and checking the oil and tyres. It’s what happens just about everywhere else. This is nothing more than featherbedded employment.
What have I forgotten?
Oh, yes, take a look at Sasol’s results for its financial year ended June 30. One item struck me particularly. A partial impairment (that means more might follow) of R2.03bn was taken on its estimated R11.9bn slurry bed reactor project because of "increased costs relating primarily to construction delays and poor labour productivity".
Meanwhile, Sasol’s gas-to-liquids projects in the US are flying ($11bn-$14bn). Production from the ethane cracker is expected in 2017. There’s no time-wasting over there. If the South African Communist Party’s Jeremy Cronin wants to know why Sasol is protecting its future by investing heavily outside this country, the reasons are all in the numbers — if he cares to look at them.
If ever reasons were needed for a substantial shift in the attitude of the African National Congress (ANC) to its alliance partners, here they are.
In its desire to express its appreciation for long-standing support during the "struggle" years, it enacted that most egregiously disastrous Labour Relations Act.
This has entrenched endless expectations and encouraged often horrible behaviour, all protected by pernicious elements of the labour statutes.
If the ANC cannot (or doesn’t want to) see the dangers that have befallen us, it doesn’t deserve to be the governing party.
Stand by for gluts and shortages
SO NOW the Competition Commission — which exists, as Norton Rose Fulbright head of antitrust and competition Heather Irvine says, to promote and safeguard competition, not competitors — is being talked about as an instrument through which to regulate prices.
The idea of controlling prices has a long and unsuccessful history.
It’s been tried many times, invariably ending in a disaster.
Of course, governments just love the whole concept of controlling prices. When, says Fiona Morton in a Cato Institute Review, they arbitrarily lower the price of favoured goods their popularity with voters soars. When they raise prices to re-establish or protect the health of an industry, lobbyists and executives think they’re the best thing since sliced bread.
The problem with price controls comes down to an essential and inalienable issue: they distort markets. The outcome is that trade is reduced, incentives encourage resources to be wasted, black markets are created, quality declines and rationing may become inevitable.
An excellent example is in the European and American farm subsidies, in which governments encourage farmers to produce commodities consumers don’t want more of — like butter.
Farmers breed more cows and a butter mountain results.
The all-knowing government is then obliged to buy the butter at the price it set — with money supplied by the taxpayers.
A requirement of price controls is that goods and services are sold at a "fair" price. But what is a fair price? It is usually the result of an interaction between buyers and sellers.
If the price is too high, buyers depart; too low, and sellers rapidly disgorge and move to another commodity or to one priced at what the market will bear. Regulatory fiat cannot hope to replace the finely honed ability of the market to set prices participants find reasonable.
But, of course, South Africa knows better than the famous invisible hand first described by Adam Smith.