SAFTU statement on the Jobs Summit and Investment Conference
September 20, 2018
SAFTU’s response to Ramaphosa’s Economic Stimulus and Recovery Plan
September 21, 2018

SAFTU’s response to appeal for its unions to go back to COSATU

The South African Federation of Trade Unions has noted COSATU’s suggestion that SAFTU unions must rejoin or join COSATU.

Firstly SAFTU, in line with its principled support of worker unity and its firm belief that the unity of workers is sacrosanct would jump at any opportunity to unite workers of the country who are currently organised into four federations.

We have made it clear that the biggest task though, and where the biggest unity is needed, is with the 76% of workers who have thus far refused to join any union thanks to some undermining of the most basic trade union principles.

In response SAFTU reprints below a letter it sent to COSATU on 17 May 2018, which shows the difference between a principled approach and opportunist grandstanding.

SAFTU is constituted by 30 unions not just by 8 former COSATU unions. There will be no NUMSA, FAWU, DEMAWUSA, DETAWU, MATUSA, SASAWU, SAFPU and SACOWSU going back to COSATU. The members of these unions didn’t walk out of COSATU; they were persecuted and dismissed without even a hearing.

By now not all of their members ever belonged to COSATU. The former COSATU unions which now enjoy being part of the young and fast growing federation will not betray the 22 other unions that constitute SAFTU which have no history that connects them with COSATU and its alliance partners.

The approach of rather than responding to the letter and engaging with SAFTU unions directly smacks of arrogance and grandstanding. The letter read as follows:

17 May 2018

Bheki Ntshalintshali
General Secretary
COSATU
Dear Comrade Bheki
RE: The unprecedented attacks on the working class
We are writing this letter to you to request an audience with the leadership of the Federation following everything that has happened which we do not wish to go back to.
We feel strongly that instead of continuing to publicly criticise you, and you doing the same, we should write this official letter to engage with you so that we can see if through a decent dialogue you will not appreciate our concerns regarding what we view as the unprecedented and most vicious attack on the working class currently underway.
We are aware that we are taking a huge political risk in writing this letter. It may be that you will see the very writing of the letter as an act of provocation and attack. We wish to assure you that, notwithstanding the history, we have no intention whatsoever of attacking you or undermining the collective leadership of your federation.
We all agree that the material conditions of the working class continue to worsen. This has been highlighted only this week following the release of the first quarter, 2018 employment statistics by StatsSA.
The ‘official’ unemployment rate, which excludes those no longer looking for work, remained at 26.7% in the first quarter 2018, exactly the same as in the fourth quarter of 2017.
Despite the creation of 206 000 new jobs in the quarter, the number of persons without jobs rose by 100 000 to 5.98 million, because the working-age population increased by 153,000 or 0.4% in the first quarter of 2018 compared to the fourth quarter of 2017.
The expanded unemployment rate, which includes every worker without a job, rose by 0.4% in the first quarter, from 36.3% to 36.7%. The number of these discouraged work-seekers increased by 249,000.
This leaves South Africa with still one of the highest rates of unemployment in the world. Employment declines were recorded in Transport (41 000), Mining (14 000), Utilities (6 000) and Agriculture (3 000).
The worst statistic remains the fact that almost one in three young South Africans between 15-24 were not in employment, education or training in the first quarter of 2018. Although there was no change in the percentage of 32,4% (approximately 3,3 million out of a total of 10.3 million) the figure is still utterly outrageous. A third of the country’s young people are effectively excluded from any activity in the economic life of South Africa.
President Cyril Ramaphosa has talked a lot about these problems and promised us a ‘new dawn’, but the workers are not going to see that new dawn if he continues to imagine that the capitalist free-market economy is going to turn his words into deeds.
The loss of 14 000 jobs in mining alone, in just one quarter of a year, shows how utopian it is to believe that the big monopolies that run our economy will suddenly start creating jobs. They, and all the other global monopolies’ are only interested in maximizing short-term profits.
The President last month announced a plan to attract $100bn investment to the country over the next five years, which he hoped would to boost economic growth and create jobs. He has launched a Youth Employment Service (YES) in March, which aims to alleviate youth unemployment through internships.
This, he says, will be a partnership between government, business and organised labour, his latest attempt to draw union leaders into a social compact to create the illusion that government, employers and workers have a common interest.
In 2015, 30.4 million South Africans, 55,5% of the population, lived below the upper-bound poverty line of R992 a month, an increase of 2.3% from 53,2% in 2011. 40% lived below the lower-bound poverty line of R544 and 25.2% had to live below the food poverty line of R441.
These figures are per person not for a household. Even on the upper bound line a person with a family of four, and with the revised 2017 line of R1138 would have to earn about R4500 to just keep their heads above water.
It should be remembered that the operative words here are “poverty line”, meaning mere existence.
According to Oxfam, 26% of South Africa’s population is hungry on a daily basis; and half of all South Africans do not have sufficient access to affordable, nutritious and safe food to meet the basic health requirements.
In addition, malnutrition is the major underlying cause of death in 64% of deaths of children under the age of five; one in five children are stunted because of malnutrition and many more are deficient in the minerals and vitamins necessary for optimal development.
These hunger-related indicators of extreme poverty exist despite the fact that South Africa is officially food secure, i.e. it produces enough food to feed the entire population. But every year R61.5bn worth of food is wasted along the production-to-consumption chain.
Given that 47% of all workers earn below the proposed national hourly minimum wage of R20, it is hardly surprising that so many are going hungry.
We have reached these levels of hunger and food insecurity despite the very important growth in spending in social grants. In 1994 less than 2% of government spending was allocated to social grants, and it has now reached around 9% of government spending.
Yes is true that some steps have been taken to try to alleviate poverty. 17 million people currently receive social grants of between R360 and R1600 a month. Social grants are the largest source of income for one in five households. But most unemployed people of working age are left out of the grant system and depend on others who are grant recipients. Above all that every recipient of social grants lives in poverty.
It is therefore no surprise that the poorest 20% of households is now largely made up of young unemployed couples with one or two children and no grandparents. This serious gap is what has driven the demand for a universal Basic Income Grant, for which all adults would be eligible.
It is an indictment on our democracy that we have so much poverty. Workers should not be made to pay for this crisis nor should they be made to resolve a capitalist crisis.
COSATU has said so much more about the extent of inequalities in our country. We live in the world’s most unequal country, with the highest Gini coefficient, which measures inequality, at about 0.68. 10% of the population earns more than 50% of the household income while 20% earn less that 1.5%.
In 2014, the median salary in South Africa was R3400, which means that 50% of workers earn below this R3400. It is an indictment on our democracy that we have sidelined millions of workers in the farms, security, domestic, cleaning services, and informal sectors to continue facing this kind and extent of humiliation at the hands of those who humiliated and exploited them during the apartheid and colonial era.
Meanwhile Deloitte accountants revealed that the average pay of executives in the country’s top 100 companies is now R17.97 million a year, which amounts to R69 000 a day and R8 625 an hour!
Many of the companies who are paying these grotesque amounts to their executives support the R20 an hour poverty wage and are demanding that the unions should agree to lower wages for their workers.
The total net wealth of 3 South African billionaires is the equivalent of the total combined wealth of 50% of the population; the richest 1% of the population has 42% of the country’s wealth; and the wealth of South Africa’s top 10% grew 64% in first 17 years after 1994, whereas the wealth of the poorest 10% did not grow at all. (Economy for the 99%, Oxfam Report, January 2017)
We in SAFTU has taken a strong position to oppose and campaign against the imposition of R20, R18, R15 and R11 an hour minimum wage. The context of our rejection of the National Minimum Wage is fully ventilated in the paragraphs above. We want to engage with you directly on these matters.
We reject the view expressed that the South African economy cannot afford to pay a R12 500 minimum wage.
In addition to grotesque salaries and bonuses paid to executives, billions leave our country yearly through illicit financial outflows. According to data released by Global Financial Integrity, between 2002 and 2011, South Africa lost a cumulative 1,007 billion rands to illicit outflows, i.e. more than a trillion rand.
In 2007 a comrade we have had a long association with, Professor Ben Fine at SOAS University, working with other radical economists, estimated that there was the equivalent of 23% of GDP that was illicitly transferred out of South Africa. In 2012, the year of the Marikana massacre, SA lost R300 billion in illicit financial flows.
Yet, this is not all. Corporations use aggressive tax planning and profit shifting, known as Base Erosion and Profit Shifting (BEPS) to dodge tax. The Davies Tax Committee estimated that this cost the country a further R50 billion a year. The AIDC provided vivid research on this practice when they exposed how Lonmin was transferring R400 – R500 million a year to their subsidiaries located in tax havens.
What their research showed is much more serious and consequently even more relevant for the trade union movement: corporations like Lonmin are not just evading tax but are involved in systematic wage evasion. Because it should be obvious when a company illegally moves, for example R100 million to a tax haven, SARS loses R28 million because the tax rate for corporations is supposed to be 28%. But for us as workers the bigger loss is the remaining R72 million (R100 million minus R28 million = R72 million) which has effectively been taken off the wage bargaining table.
This is extremely relevant for the debate on the minimum wage and the argument that the corporate friendly government of President Cyril Ramaphosa uses, namely that the companies cannot afford to pay a living wage. In the Lonmin case, AIDC was able to show that had Lonmin not shifted R400 / R500 million to tax havens they would have been able to meet the rock drillers demand of R12 500.
We believe that this provides a full context of the debate we should have.
In addition to this we believe that the Bills amending the Basic Conditions of Employment and the Labour Relations Act represented an attack on the right to strike. We attach the submission we made to parliament which expands on the assertion we are making.
We believe the Bills passed by the Labour Portfolio Committee undermines even the Nedlac agreement that we have vehemently rejected.
We would appreciate an opportunity to take you through our concerns in this regard.
We are mobilising every working class formation around all of these issues and more. We are not mobilising against COSATU or any other trade union. We are mobilising against the capitalist class and neoliberalism that continues to systematically attack the working class living conditions.
We hope to hear from you. We suggest a ten-a-side meeting to explore these and other issues you may wish to raise.
Yours comradely

Zwelinzima Vavi
General Secretary