Erich Bloch Column: Labour demands beyond employer means
http://www.theindependent.co.zw/
Friday, 20 May 2011 09:19
WITHOUT exception all employers have been confronted with demands, from
employees in general and the labour force in particular, for increased
wages. Most collective bargaining agreements have been reached after
prolonged, usually very confrontational negotiations, frequently only
concluded after referral to arbitration, or to the labour court, and almost
always being of very limited duration. Within months of the agreements
coming of force and effect, new demands for wage increments emanate
vociferously from the representatives of the labour, usually vigorously
goaded and reinforced by the trade unions. All too often, not only are the
demands centred upon major increases, but also with insistence that such
increases be with retrospective effect.
That workers crave substantial wage increases is unsurprising because wages
are far below the workers’ essential needs. In most instances, wages do not
suffice to meet the fundamental living requirements of the workers and their
immediate families. In addition, as a consequence of the gargantuan levels
of unemployment, and due to the impacts of HIV/Aids and innumerable other
health constraints, most income earners have not only responsibilities for
their immediate families, but also for innumerable other dependants. It is
little wonder, therefore, that workers consistently seek improvement in
their incomes.
However, in doing so they are all too often dogmatically oblivious to the
reality that very few employers have the resources to fund the demands for
higher wages. On the one hand, commerce and industry has had its capital
resources wholly decimated by the history-breaking hyperinflation that
confronted Zimbabwe in 2008. The capital required to continue operations is
trillions’ percent greater than was needed before hyperinflation flagellated
all sectors of the economy. Almost all enterprises were undercapitalised to
fund operations at even the abysmally low levels that prevailed in 2008, let
alone to meet the needs of any business growth.
On the other hand, the survival of businesses continues to be contingent
upon competitively pricing in both domestic and export markets. Since 2009
Zimbabwe has had vast inflows of goods from neighbouring countries, from the
Far East and from other countries.
Almost without exception, the foreign suppliers benefit from higher volumes
of production than attainable by their Zimbabwean competitors. This enables
them to spread their production costs and, therefore, to minimise selling
prices. In addition, their wage levels are considerably less than those
prevailing in Zimbabwe (notwithstanding the inadequacy of those wages to
sustain the Zimbabwean workers) and as a result, the foreign suppliers can
price their products very competitively. The same circumstances impede
Zimbabwean product competitiveness in export markets.
In those circumstances, however great workers’ needs for higher wages, their
demands are grossly unrealistic. They cannot be met by employers, and
trigger innumerable business closures or, at the least, downsizing with
concomitant diminished numbers employed. But workers and trade unions are
myopically oblivious to this. The divide between business and workers has
been growing greater at an exponential pace. It is undermining the best
interests of employers, workers, the economy in general, and the populace as
a whole.
Recently Zimbabwe Congress of Trade Union president Lovemore Matombo, in an
interview with The Legal Monitor said that consultations were underway
between labour organisations across the sector to mount strong action
against employers.
He said that the patience among workers had worn thin, and that “every
labour movement, every trade union in this country, has a problem with its
employer and what we are saying is let’s galvanise support so that as we
approach June, all of us are geared to go on a strike, but it has to be
collective.” He contended that “we will have to do that. We have no
option.”
He added that the confrontation was most likely to take place because
government and most employers were resisting calls to match salaries and
wages to the poverty datum line (PDL). It currently stands at just over
US$500, whereas most workers in the public and private sector earn between
US$100 and US$300. That workers, supported by their trade unions, aspire to
earn wages equal to, or above, the PDL, cannot be faulted. No one can wish
that others should be struggling to survive in extreme poverty. They however
ignore many fundamentals including that:
Employers cannot pay that which they do not have;
It is better to earn little, than to earn nothing. When demands are pitched
at employers at unsustainable levels businesses collapse and the workers are
rendered unemployed, and therefore wholly devoid of income;
Endless wage confrontations impair the already low levels of productivity;
Wage demands beyond employer means not only halt Zimbabwe’s economic
recovery, but will reverse it. That will result in even greater poverty. It
will result on more becoming dependent upon the few fortunate enough to have
some income, even if that income is inadequate.
Because workers and the trade unions obdurately disregard the realities and
instead intensify their demands and confrontation, they are suicidably
destroying themselves, concurrently with their destroying Zimbabwe and its
economy.