Time for a united effort

Another aspect to the current worrying situation regarding employment in South Africa that I wrote about yesterday is the following. In South Africa, as in many countries the world over, the triumvirate of government, labour organisations and employers seem to have dug themselves in trenches and are sniping at eachother. All in the name of representing their members or voters. If history has taught us anything it is that trenchwarfare is a war of attrition which leaves many unneeded casualties on the field and hardly ever achieves any goal worth achieving.

The government in South Africa is trying very hard to redress the inequalities that were always prevalent in the country and enhanced during the Apartheid era. A commendable cause for sure. The question is if the way they go about it is actually yielding the maximum result possible, and at what cost. The cost is not only in money here, the cost is even greater in the development of the economy, the faith and trust in the government from its people and from the would-be investors, domestic and foreign.

The labour organisations are demanding that their members get a fairer slice of the economic pie. They rightly argue that it is unfair for the employer/business owner/investor to take the lion share of the profits whilst the average worker is still more often then not living in abject poverty.

The employers will strongly, and equally right, argue that to increase the cost of doing business and production will have to lead to a drop in profits for the shareholders, thus reducing the appetite to invest. The return on investment is simply better elsewhere. And in a global economy that is a very real threat.

Labour and employers are also at loggerheads about the increasingly restrictive labour laws, which make hiring anybody a less interesting proposition for the employer. Both are pressing government to change the labour laws, albeit in opposite directions.

Added in this complex mix is the inequality that still exists in the nation with regards to race.

It really seems that even Solomon would have declined to mediate in this situation. It just is too complicated and with too many defensible positions on all sides.

So I would suggest that all the parties stop their sniping at eachother, leave their trenches and start looking at the battlefield. What exactly have you accomplished, what are the casualties and how can this be resolved in everybodies interest? What exactly is the goal you wish to achieve?

I think the starting point will have to be macro-economic. All parties have a vested interest in a strong, vibrant economy that is capable of growth and of creating a certain amount of wealth for all the citizens of the nation. If this assumption is correct then the next step is to ask how this can be accomplished without further deteriorating the position South Africa has on the list of nations that attract foreign investment. This capital is needed to fund the growth of the economy and the well-being of the people.

If there is one thing investors crave (besides good profits) it is predictability of the way a nation will behave with regards to them and their interests. To provide this it would seem reasonable to make multi-year agreements between the three parties I mentioned earlier. These agreements should encompass both wage increases as well as a coherent strategy to redress the inequalities that still exist. However, all parties must realize that their wishes cannot be met within this period of time, and should moderate their wishlist accordingly.

If they are able to actually agree on the issues for a term of lets say 5 years (or 3, whatever is possible) then the agreement should do away with the annual cycles of strikes and lost production time. This alone will increase the productivity to the point that all can have a little bit more on their list fulfilled. And the peace on the labour front as well as the legislative front will entice foreign investors to give the nation another good hard look at least.

In this situation there is no 'silver bullet' that can slay the beast instantly. But working together with common goals can starve the beast to a certain death. The trench warfare needs to be replaced by the negotiating table, attended by parties that realize that ultimately they all have the same common interest: a more prosperous South Africa with a happier and more prosperous workforce.

Maybe Solomon can give a hand at the negotiating table afterall.