The South African Federation of Trade Unions strongly condemns the decision by Pick n Pay to cut its workforce by a massive 10%. It is another symptom of a deepening crisis in the retail sector and the economy as a whole. And as always it is the workers who are being forced to pay the price.
Pick n Pay refuse to say how many jobs are going, but it is estimated to be around 3 500. They try to present this move as a “staff reduction programme”, in which workers have accepted “relatively generous severance packages”. But even if that is true, workers surely only have accepted these packages in desperation to raise some cash to escape from debts accumulated over years of low pay.
The workers who have left will struggle to find other employment in the current climate and if they ever decide to come back to the company, as one analyst has noted, “people will be employed on the tougher terms offered in the industry”.
These “tougher terms” will surely mean even fewer full-time, permanent positions and more casual and part-time jobs. Overall in retail and hospitality today over 30% of jobs are casualised. Labour brokers, the main drivers of casualisation, have attacked the principle of decent work, driving down workers’ wages and conditions of employment.
It should also never be overlooked that the retail sector, more than any other, displays the most obscene levels of inequality, most blatant in the case of former Shoprite group chief executive Whitey Basson who retired in 2016 with R1.8 billion Shoprite shares in his possession.
Pick n Pay have tried to appear more sensitive by denying their executives any bonuses this year, but workers will not be fooled. In 2016, its CEO Richard Brasher received a short-term annual bonus of R15m, taking his remuneration to R24.4m, so its is hardly a sacrifice for him to have to survive in 2017 on remuneration of just R10m even without his bonus!
The job losses in retail are a symptom of the broader economic disaster facing South African workers. This will be reflected in the upcoming quarterly Labour Force Survey, which is likely to show a further rise in unemployment from the already massive 27.7%, the highest for 14 years, while the higher but more realistic expanded rate is 36.4%.
These figures not only mean misery for thousands of unemployed workers and the hundreds of thousands of their dependents (now estimated to be an average of 15 per employed worker). They also have a direct bearing on the crisis in the retail sector, because as more workers lose their jobs and their dependents fall into poverty, the less money is in circulation to buy the goods in the shops.
This sets in motion a vicious circle; as fewer workers have an income and those still working are paid less, demand for goods and services declines. This cuts the profits of companies like Pick n Pay, who then look for ways to cut their labour costs, meaning that even their own staff cannot buy the very goods they are employed to sell.
All this leads the whole economy getting worse. A report just compiled by Unisa and Momentum, notes that GDP growth declined from 3.3% in 2012 to 0.3% in 2016, and it is expected to dip below 1% in 2017 and 2018. It estimates that the number of those unemployment could increase by a further million by 2018!
The team’s researchers say that the figure could easily soar past the one million mark, since “It’s clear from available employment figures that many businesses are struggling to survive with the implication that they will on average rather shed more jobs than create more jobs… It has been a year of unmitigated carnage for South Africa’s economy.”
What the report fails to say is that this economic catastrophe is structural. A highly monopolized capitalist economy, like South Africa’s in particular, is incapable of sustaining economic growth.
It is the most unequal society in the world, run by a super-rich elite who can see no solution to the crisis except cutting their labour costs. They ignore the inevitable misery that this inflicts on workers and consumers, but also the fact that ultimately it hits their own businesses, which can no longer find a market for their products and services because the people have no money with which to buy them.
All this structural crisis is made even worse by the ongoing looting of the country’s resources in both the public and private sectors by politicians, chief executives and middle-men. They have sabotaged key economic institution like Eskom, Prasa and SAA, which ought to be drivers of economic recovery but in fact have become an enormous drain on the economy after years of plunder by these corrupt cronies.
Yet these are the same people who now suddenly start preaching demagogically about “radical economic transformation” and “white monopoly capitalism” in the hope that this will arouse some sympathy from the workers and the poor. It is just empty talk. They have no solution but are at the heart of the problem.
The ANC government has adopted a neoliberal capitalist strategy which has turned villains into millionaires, impoverished the people, disrupted service delivery and left education and healthcare as a privilege for the rich.
Zuma has not only failed to end white monopoly capitalism but on the contrary his government embodies all the worst features of the system they pretend to be fighting. Corruption is not confined to the government and public service, but is inherent in the whole monopoly capitalist system.
The fact that others are involved in such crimes, however, in no way exonerates the ANC leaders, particularly as they do so as elected representatives of the ANC.
That is why SAFTU insists that Zuma and his entire cabinet must resign, and those implicated in corruptor be criminally charged.
SAFTU however warns that this in itself will not in itself put an end to corruption and certainly not an end to capitalism, and the federation will oppose any attempt to resolve this crisis within the parameters of a corrupt capitalist system which has proved that it has no solutions.
The only way out of the crisis has to be through a mass movement of the working-class, based on a program guided by the principles of Marxism-Leninism for a new growth path through the democratic nationalisation of the mineral and manufacturing monopolies, the banks and the land, and a democratically planned economy in line with the aspirations expressed in the Freedom Charter.