Redistribution of income had worked against the working class with the inequality of earning power deepening between races and providing a recipe for an uprising, Cosatu secretary-general Zwelinzima Vavi warned at the federation’s provincial conference in Pietermaritzburg this week.
The government’s promised “second phase” of liberation would be a hollow slogan if it did not address the huge wage disparities between the salaries of top executives and the lowest-paid workers in the public and private sectors.
Discussions at the conference focused on how there had been a decline in the real incomes of African households between 1995 and 2005, and income inequality had increased across the board.
Vavi said that, in 1995, the Gini coefficient (measurement of poverty) stood at 0.64 but increased to 0.68 in 2008, adding that there had been reverse redistribution from the poor to the rich.
“In 2008 the top 20 directors of JSE-listed companies, the overwhelming majority of whom are still white males, earned an average of R59 million per annum each, while in 2009 the average earning of an employee in the South African economy was R34 000 per year.
“On average, each of the top 20 directors in JSE-listed companies earned 1 728 times more than the average income of a South African worker.
“On average, between 2007 and 2008, these directors experienced 124 percent increase in their earnings, compared to below 10 percent settlements that ordinary workers settled at,” he said.
Vavi said “hefty” increases were also seen in state-owned enterprises.
In the public sector negotiations under way, the unions are demanding a 7 percent pay hike while the government is offering 6.7 percent and 2.5 percent on additional benefits.
The deadlock looks likely to end in an industrial showdown in the public sector.
“The top 20 directors in SOEs (state-owned enterprises) experienced a 59 percent increase in their earnings, collectively raking in R132 223m.
“This amounts to R6.6m per director, which is 194 times the average income of the South African worker,” said Vavi.
“An average African man earns in the region of R2 400 per month while an average white man earns around R19 000 per month.
“The racial income gap is therefore roughly R16 800 among males,” said Vavi. He said this “race gap” was overwhelmingly severe among men.
“These income disparities are deeply connected to the social relations of production on the factory floor and other places of work, and macro-policies that violate the historical commitment to redistribution,” he said.
Vavi warned that some countries ignored these disparities and were brought to their senses by uprisings.