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Positive acts needed to heal labour relations

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In his book, The Tipping Point, Malcolm Gladwell talks about how adolescent male suicide took off in Micronesia. It’s not one of those activities, like smoking, that you would expect to catch on as a fashion or a contagious habit.

Yet this is exactly what happened – after decades without any teenage suicide, one tragic event of a teen hanging himself due to relationship problems led to a spate of others with problems of love hanging themselves. The escalation got so bad that younger teens were found to be “trying out suicide”, the survivors later claiming that they wanted to see what it was like but had no intention of killing themselves.

In this context we must be wary of commentators who claim that because the five-month platinum strike was so costly to workers, it is unlikely to occur again in other industries or sectors. In some ways the strike achieved a lot – it opened dialogue among South Africans and brought more accurate awareness of the nature of mineworkers’ wages and the state in which they live.

But what it didn’t do was bring much benefit to workers. The highest growth, granted to the lowest-paid workers, is a 13 percent annual increase in the cost-to-company package, which will take years to pay off the losses suffered by workers due to the months away from work.

Rational economic behaviour says this means that other workers will be less inclined to strike in the same way if the benefits are unlikely to cover the costs. But the first mistake in understanding economics is to assume that it is based on rational behaviour measured by a strict cost-benefit analysis. Economics is not accounting; it is not numbers. Economics is the study of how we get the most from the little we have and the most common way in deciding this is by following the lead of others.

The workers, companies, and South Africa as a whole need to ensure that the latest platinum strike doesn’t become a Micronesian suicide-style epidemic. There is no benefit to anyone, but it is on the cusp of happening. This is not to say that workers must not stand their ground and fight for what they believe is rightly due to them. But we need a mechanism where rights are accurately measured and resolutions found without causing half a year’s disruption to industry.

The relationship between labour and firms is the keystone to the economy. Both the arguments that firms cannot survive without labour, and that labour cannot survive without the firms, are redundant because it is neither one nor the other: they are essentially the same thing and in the determination of wages and working conditions this needs to be recognised.

Workers need to take responsibility for the sustainability of their firms, and firms need to take responsibility for their workers. In all the dramatic discussion around abuse and exploitation we forget that there are millions of examples all across the country where the relationship between labour and the firm works. These are the examples that need to be learned from, followed, and copied. These are the leaders that need to spark behavioural epidemics.

Recently, Starbucks announced that for all its staff working more than 20 hours a week it would finance their last two years at university. Its employees serve coffee – a degree is not going provide much benefit to the bottom line of Starbucks.

This is a call for examples that show that in South Africa conflict is not the only path to resolution.

Pierre Heistein is the convener of UCT’s Applied Economics for Smart Decision Making course. Follow him on Twitter @PierreHeistein


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