A damning report on wages in the platinum belt has found that producers made substantial profits in the past 13 years with little benefit to employees.
The report by Wits University-based Research on Money and Finance, called “Demanding the impossible? Platinum mining profits and wage demands in context”, notes how platinum producers made enormous profits between 2000 and 2008.
According to the report, during this period labour received a “very thin slice of the pie with its share of the value-add produces, averaging just over half of the South African norm”.
Shareholders and executives took home huge sums in dividends, a preview statement on the report said yesterday.
“When considering the 13 years – 2000 to 2013 – as a whole, the trends are less extreme but still significantly skewed towards above average returns, low wage shares and shareholder gains.”
The report also offers an example of the cost of the Association of Mineworkers and Construction Union’s (Amcu’s) wage demands put alongside the dividends paid to shareholders over the 13 years. It shows that the producers’ current offer is less generous than they profess and that the demands of the workers are less costly than the producers claim. The report concludes by raising wider questions of how workers and South Africa can best benefit from the country’s mineral wealth.
The report will be launched at Wits University’s graduate humanities seminar room at 1pm on Friday.
It comes with the protracted strike, which has been marred by violence and intimidation, now in its fifth month and all eyes on the government’s latest intervention through an inter-ministerial task team that has brought together Amcu and the mine bosses. About 70 000 Amcu members downed tools on January 23 to demand a R12 500 minimum basic salary.
Edcon
Retail company Edcon’s results present a way of analysing how consumers are weathering these difficult times.
Here is a clothing and footwear retailer that services all economic tiers.
The discount division, which houses stores such as Jet, Jet Mart and, to some extent, Legit, trades in the lower end of the market. Edgars, Boardmans, Red Square and other shops service middle- and upper-income consumers. The annual numbers therefore make illuminating reading.
Edgars stores, which sell international brands and high-priced clothing, recorded a slowdown in sales growth to 2.7 percent from 4.1 percent a year earlier. This division’s gross profit margin narrowed from 38.6 percent to 36.7 percent.
The discount division posted a pleasing top-line performance, with cash sales up 16.9 percent, as well as good growth in profits with gross profit margin expansion of 1.1 percentage points to 34.1 percent.
“This positive sales performance was due in part to a strong performance in women’s wear, which grew market share, while other merchandise groups also performed well.”
Is this not a sign that struggling consumers are trading down?
Edcon chief executive Jurgen Schreiber replied: “Not really, as both stores were seeing a decline in credit sales. We have noticed that the discounting side was always striving in a environment where things were a bit tough.”
He said consumers were being more cautious about what they spent their money on. Schreiber, however, conceded that consumers in the middle-income bracket were under pressure and that they might be trading down.
With discount division stores doing well, Edgars stores, which are to a greater extent credit independent, saw more sluggish sales growth in its rural shops. Schreiber said this was a sign that low-income earners were also not in a good space.
The retailer plans to spend R1.1 billion on capital expenditure in the financial year 2015.
Edited by Peter DeIonno. With contributions from Dineo Faku and Nompumelelo Magwaza.