Unions intentions and motivations are not always clear, because of a perception flaw. What to do about it?
As the unionized workers at the South African Airways (SAA) go on strike, thousands of passengers will need to change their travel plans at the very last minute. Many will forego their holiday in South Africa, affecting many related industries.
On the face of it, the unions reasoning seems sound. They argue that it was not the workers who caused the R26bl in accumulated losses generated thus far, so they should not bear the consequences. The governments wage offer was rebuffed. Instead they are demanding that no jobs may be on the line over the next 3 years. The management of SAA however proposed that just more than 800 jobs will go as part of their turn-around plan.
This is a familiar sequence of events. Unions drum up support by defending the plight of the workers. They demand above inflation increases in addition to other benefits such as housing and transport. This effectively makes labor in South Africa pricier relative to its peers, and less productive (because the higher wages are not coupled with productivity increases). Although in boom times this makes sense, it is fatal in bad times. Businesses like SAA, that are effectively bankrupt can only survive if they are restructure. This always means sacrifice by all stakeholders. The alternative can be seen in the textile and mining industries. Mines tried to gain efficiencies by mechanizing, and those who failed had to shut down. The textile industry is a shadow of its former self, despite Governments effort to help by levying a 40% import duty on garments from abroad. The job losses contributed to South Africa’s record-breaking high unemployment rate.
So why are Unions still so demanding, even at the risk of pushing the business into ruin?
The short answer is that Unions are businesses themselves. Like a sport club, they prosper if they get more members, and fail if members leave. It can be a very lucrative business as such. There are about 3 million unionized workers in South Africa. Assuming that they pay about R120/month for their memberships, it means that the “union industry” is worth about R4.3bl, a sum worth fighting for. All you have to do is to fight harder than the next union, to attract more members. And then you fight for your members to not be dismissed.
Long gone are the days of the 1980’s where Unions down tools to fight against an abusive regime, where they fought for the equal recognition of workers and where they fought for basic human rights.
The stranglehold of Unions doesn’t only businesses but also government. The South African government was not even able to implement a pay policy in the education sector where the pay of teachers would reflect their ability to teach. As a consequence, poorly performing teachers get paid the same as those who put in extra effort to make sure that their scholars get the best education possible. This negativity is amplified by the fact that the governing ANC is in a tri-party alliance with Cosatu, a union collective, as well as the South African Communist Party. That means that government policy is influenced by a body that is motivated to do not what is best for South Africa, but what is best for their Unions members. A very precarious position.