Ramaphosa can only win on jobs by Cosatu
But at least newly minted Finance Minister Tito Mboweni has made a promising start by articulating what the realities are, rather than just regurgitating dogma and pandering to vote-catching ploys. In last week’s mini-budget, he threw down the gauntlet on two issues.
First, it is unsustainable for government to spend 80% of revenue on public service salaries and only 20% on development. Second, if we want good roads, we must pay the fees that fund them.
The Congress of SA Trade Unions (Cosatu) - the ANC’s nominal alliance partner and arguably the entity most responsible for snagging the presidency for Cyril Ramaphosa - predictably went ballistic.
On the issue of paying for services rendered, Mboweni was being “provocative”, a “bully” and had “no mandate”, Cosatu fumed. On the public wage bill, Mboweni was “blaming the workers” instead of cutting costs at the top and would “strain relations” with his “provocative” actions.
The powerful, non-affiliated Public Service Association castigated Mboweni for stating that Treasury would not pay for public-sector wage hikes for the next three years, but instead national and provincial departments would have to “absorb these costs within their compensation baselines”. Less diplomatically put, this means that if departments want to hike wages, they will have to cut staff.
The provocative Mboweni has placed the DA in a quandary. With a 2019 general election looming, the last thing it wants to do is what it should do - hail Mboweni’s good sense.
On e-tolls, the DA has taken the popular but unsustainable position that they are not necessary. And on public sector cuts, while the DA has in the past rued the high state wage bill, in its “Seven-Point Plan” released a fortnight ago, the best it could do in this regard was to suggest cutting the Cabinet to 15 ministries.
The crux issue is whether the Ramaphosa administration is any different from its predecessors in its ability to deliver. The research has been consistent for decades - the most pressing issue for most South Africans is jobs.
In 2010, the ANC promised to create five million new jobs. In reality, the economy shed jobs, as it had done virtually from the moment president Jacob Zuma took office.
In 2014, the ANC appeared to up the stakes. Zuma announced that there would be six million extra “work opportunities” by March 2019.
Notice the change in phrasing, evidence of the ANC throwing in the towel and resorting to spin. A “work opportunity” is not a job. It’s a short period - at most, a couple of weeks - of mostly make-work, funded by the state as a social good.
A job, on the other hand, is an ongoing activity where you are remunerated for the surplus value you add to an enterprise by dint of skills and hard work. It ends only if you move on, or if your employer goes bankrupt, or if you perform poorly.
In the global, economically flourishing world, most jobs are created by industrialists, manufacturers and entrepreneurs.
Much of state employment is not true job creation. It’s a camouflaged social benefit, with the additional advantage of delivering large numbers of voters invested in the survival of the government that is dishing out the “jobs”.
And high-profile job summits? Well, that’s public relations. Sustainable employment creation does not happen on command.
Minimum wages may make us feel virtuous but are a deterrent to risk-taking, employment-breeding startups. They also encourage existing enterprises to mechanise rather than hire. So, too, do unions that have become too powerful and with impunity wreck enterprises by sabotaging plant and assaulting non-striking workers.
Ramaphosa - the former union leader who is critically dependent on Cosatu and the SA Communist Party - will have to repudiate the very shibboleths that handed him the presidency.
In that sense, he can only succeed by failing.
Follow WSM on Twitter @TheJaundicedEye
*** The views expressed here are not necessarily those of Independent Media.