As we are beset by industrial action yet again, following on so closely after the disastrous strike in the platinum industry, I found myself thinking about this in more detail this morning as I listened to the news on Radio 702.

I have always simply followed the logical way of thinking about wage negotiations, namely:
  1. The employees say they require X;
  2. The employers say they can only afford Y; and
  3. The two meet somewhere in the middle, let's call it Z.
Firstly, there is an inherent flaw in the logic here.  If the employees really require X and they settle for Z, then their basic requirement is not being met and they are "out of pocket".  Similarly, if the employer can really only afford Y, then by paying Z they are fundamentally harming the business (perhaps fatally) to the detriment of all.  So, whilst Z may represent a compromise, it ultimately benefits neither the employer nor the employee. Logical?

Secondly, I consider myself a conservative capitalist with social responsibility leanings. Oxymoron? Through these capitalist spectacles, I have long held the view that people can only be paid what their productivity justifies.  Therefore, in South Africa, with low productivity (when benchmarked against other nations), we "deserve" to suffer from correspondingly low wages. However, this morning on my drive to work, listening to the radio, I was struck by an epiphany!  Maybe it is not that our wages are too high for our productivity/skills/education but that our productivity/skills/education is too low for our wages.  I know that most people are saying this is merely a play on words (or semantics) but I now think that a shift in mind-set is required.

If we approach the problem with a view to raising productivity/skills/education to a level that matches the salary rather than merely paying an amount that we believe matches the productivity/skills/education of the employees, we can completely disregard Y and Z in the above scenario and aim for X (or above).  However, it would be incumbent upon government, business and the trade unions to fundamentally focus upon productivity/skills/education.

Utopia? Maybe. The problem is that this is a medium to long term solution and in a world where everyone wants a quick-fix.

Gareth Shepperson
Commercial and Property Attorney


  1. I think there is one thing that you are forgetting!
    In South Africa, we don't really consider productivity or efficiency when looking at our business models. Instead we make jobs where there are no jobs, just to employ the masses and we as the government legislate to protect these ficticious jobs. E.g. the petrol attendant job is an unneccessary, inefficient, unproductive situation, and should be replaced with automated systems as they have overseas. But in order to protect obsolete jobs, the government has deemed it illegal to automate the dispensing operation at the pump! The same goes for the mines, where we continuously hear Amcu and Cosatu branding statistics of what the miners earn overseas compared to our miners. What they do not tell you, is that overseas mines are very automated and require probably 15% - 20% of the labour that we require with our unautomated systems. In fact there was a comparison done on equivalent mines in Canada, and if I remember correctly, for the same output of the same comodity, the SA company had a staff complement of 20,000 whereas the Canadian mine had a staff complement of 5,000!
    Again, we could automate and become efficient and productive but then we need to give up 15,000 jobs and the mining companies are under pressure from government not to lose jobs and therefore we do not become efficient and automate. Bearing in mind that the government owns the mining rights and the mining groups have to apply for these mining rights on an on going basis, so the mining groups have to tow the line and keep the 15,000 obselete jobs.

  2. Thank you for your comment Anonymous.
    I agree that statistically speaking you are absolutely correct. I also agree that it would be of direct benefit to the petrol station/mine to automate but it would be conversely be detrimental to all of us to absorb the additional drain on the economy created by all the job losses caused by that same automation. What I am saying is that government, business and labour need to up-skill those miners/petrol pump attendants in order for them to be in a position to take advantage of the automation rather than be devastated by it.
    As I said in the Blog Post ... Utopia - maybe?

  3. Sorry, in my last comment I used the word "up-skill".
    It is one of these "modern" words that have crept into our language like "learners" instead of "pupils" and "engage with" instead of "speak to".
    I should have said "train".


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Denny Crane

Denny Crane
It's not me ... yet. Denny Crane from the TV series Boston Legal. Click on picture if you're not sure who he is!