Cosatu Job Strike

This week saw a mass march and strike led by COSATU, allegedly, across the country. The main demand of the march was to end unemployment, raise the minimum wage and introduce a tax on the rich.

Like a rhino poacher complaining about the lack of rhinoceros, COSATU is once again showing the typical ignorance and hypocrisy which we have grown to know them for. This is due to the fact that COSATU is, fundamentally, one of the main causes of unemployment in this country. A combination of threats on businesses as well as the policies it endorses, keeps us in an unemployment trench which, as long as it maintains its power, will be very hard for us to climb out of.

This makes it particularly ironic, and its supporters seem particularly idiotic, that they are marching simultaneously for employment and a minimum wage. Moreover, marching against unemployment is akin to staging a strike against a hurricane. The metaphysical concept of unemployment isn’t scared of your marching or your demands. Businesses aren’t going to employ people just because you are shouting at them. In fact, they are probably going to be more inclined to fire you or stop production.

Demanding that government employ more people is also completely counterproductive. Public jobs cost more taxes, are inefficient and add no value to the economy. A state job gained is a myriad of private jobs stolen, with nothing gained.

The problems with this strike are numerous, and that makes it even more disappointing that I have to point them out to some. As such, here is a breakdown of some of the more pressing problems with COSATU’s demands.

Unions cause unemployment

A trade unions job is to protect its members, people who are already employed. New entries into the job market are threats to their members as increased supply of workers results in lower wages and increased competition. This isn’t good for a union’s interests. In this way, it isn’t in a union’s interest to encourage employment.

Then why is it that COSATU claims that it does? The most probable reason is some form of ignorant adherence to socialist principles. The problem with this is that socialism doesn’t actually like the unemployed. It is a workers movement and the unemployed are ignored (even persecuted). In rhetoric, they may be pro-poor, but in actual fact they are partly responsible for our large unemployment rates.

Union interference scares away businesses. We’ve already seen how labour regulations, BEE and multiple threats have chased away potential employers and, despite socialist claims, we actually do need employers to have employment.

Continuous threats against business by COSATU just add fuel to the fire, further scaring potential employers away. This means more unemployment and a shrunken economy.

Minimum wages cause unemployment

One of the demands of many COSATU protests is an increased minimum wage (because we actually do have one, despite implications that we don’t). The Free Market Foundation have done very good work to dispel the myth that a minimum wage would actually help, but COSATU and many socialists don’t seem to care.

This is actually a policy that fits more honestly into the union mandate. Minimum wages do help a lot of workers, but only the ones who survive retrenchment and actually have jobs in the first place. A high minimum wage completely ignores the nature of income.

Some businesses, especially small ones, cannot afford to pay their workers over a certain amount, lest it becomes unprofitable. In addition, it is ludicrous to pay a burger flipper R150 an hour when they can only generate R100 in income. It doesn’t matter if some may think this unjust or unkind, this is a fact of life which we cannot overlook.

The fact that COSATU is simultaneously protesting for jobs and a minimum wage just shows their ignorance of basic economics.

The rich are already taxed

Tony Ehrenreich stated that: “We [COSATU] want them to tax the people who live in Clifton and Sea Point.”

Does he know that they are already taxed? Quite a lot in fact. South Africa uses a sliding scale ‘progressive tax’ system, which means that higher income earners are going to be taxed more than anyone else. There is absolutely no point, regardless of ideology, to protest for a tax against the rich. They are already taxed more.

The fact that this increased tax actually hurts the economy and is blatantly unethical is another story altogether. The fact remains that this demand is completely unfounded and ignorant.

Conclusion

It doesn’t come as much of a surprise that COSATU continues to be hypocritical. Socialism is, after all, the ideology of hypocrisy as its adherents preach equality while utilising the prosperity of Capitalism. I don’t expect us to be able to successfully convince any COSATU members of the ludicrousness of their cause, but at least we can examine them from afar and consider how our country has fallen so much.

 

Nicholas Woode-Smith is co-founder of the Rational Standard and its Technical and Marketing Director. He is a student at the University of Cape Town, with majors in Politics, Philosophy and Economic History. He is the youngest council member of the Institute of Race Relations in history and the Regional Director of Southern Africa for African Students For Liberty. He also writes science fiction – prominently, the Warpmancer and Cape Zero series.