Business blames unions for weak economy
Business Leadership SA boss says labour's inability to compromise on salaries at Eskom and on its unbundling has weighed on growth
As SA’s growth outlook threatens to stutter once again in 2019, business has called labour to task for its alleged role in holding the economy back.
“There is no difference between labour and capital today. The secretary-general of a union earns the same salary as a CEO. All they are looking for is returns on their investment,” Business Leadership SA (BLSA) CEO Bonang Mohale told Business Day on Wednesday, Workers’ Day.
The business organisation, which represents more than 70 of the country’s biggest companies, said labour’s inability to compromise on salaries at Eskom and the unbundling of the embattled power utility has weighed on the economy.
“Our social compact says for the sake of being globally competitive, you will forgo increases above inflation. The single biggest risk to the economy is Eskom. Had the unions compromised, they would not have taken salary increases or bonuses and Eskom would not have escalated load shedding from stage one to stage four,” said Mohale.
SA saw the return of load-shedding in November, with the most severe power cuts the country has seen. There were 26 days of power cuts up to the end of March. In 2018, Eskom employees had a 7.5% wage increase, after fraught negotiations between the power utility’s board — which initially opposed any increase — and the unions.
While the Treasury expects growth of 1.5% in 2019 , the Reserve Bank, which expects 1.3%, said in April that if power cuts persist throughout 2019, it could shave as much as 1.1 percentage points off growth for the year and more than 100,000 job losses.
“Labour has been allowed to run amok. We all need to identify what we’re willing to give up to stabilise the economy and labour hasn’t done that,” BLSA COO Busisiwe Mavuso said.
With growth that has failed to breach the 2% mark in five years, Mavuso said there was no rationale for increases above inflation.
“They see unbundling as privatisation but where does that come from? We need to get Eskom in order,” Mavuso said.
Union federation Cosatu, however, has hit back at business for using labour as a scapegoat.
“The excuse of labour inflexibility is tired. We reject it, it’s nonsense. The system which exploits black workers is clearly untransformed,” Cosatu spokesperson Sizwe Pamla said.
“The economy is weak because of the supply-side of the economy that doesn’t allow people to participate.”
He said Cosatu had sought clarity on unbundling but the government could not explain how it would be carried out.
“We are not opposed to the idea, we are asking for an explanation. How is unbundling going to solve the crisis at Eskom? It’s not just jobs at Eskom at risk but jobs in this economy,” Pamla said.
He said labour suspected that unbundling would be used to sell the electricity generation component of Eskom to the private sector because there has been no clarity from the government.