21 May 2010

National Office Bearers of the Young Communist League
Distinguished guests
Comrades and friends

I must begin by congratulating the Young Communist League for convening this historic Summit on an issue of such critical importance to our future as a nation, and indeed our world.

I have said many times that our country is sitting on a ticking time-bomb, as the ranks of the unemployed youth keep swelling, and as they become more and more demoralised and desperate, given the lack of any prospects of future prosperity, security and self-respect. It is a problem we simply cannot afford not to solve, and who better to initiate the fight-back than the class-conscious and militant Communist Youth?

It is a problem not confined to South Africa. The ILO has reported that the number of unemployed youth worldwide increased by a staggering 10.2 million from 2007 to 2009, the largest rise since 1991.

ILO Director-General Juan Somavia, commenting on this statistic, said that “With 45 million young women and men entering the global labour market every year, recovery measures must target job creation for our young people… We need the same policy decisiveness that saved banks now applied to save and create jobs and livelihoods of people”.

South Africa reflects the global pattern. The Labour Force Survey estimates the unemployment rate among 14 to 24 year-olds at 50% – double the general unemployment rate. 72% of the total number of the unemployed are between 15 and 34. Of these, 78% are African and the proportion of Africans in total youth unemployment is 90%. Already, there is a significant and growing number of youth who have never been in any type of employment.

The majority of these jobless young people live in poor households where older family members are also likely to be unemployed. Almost two thirds of South Africa’s young people aged 15 to 24 live in households with expenditure of less than R1 200 per month, as do 60% of those aged 25 to 34.

Even more disturbing is the relentless rise in the number of those not economically active, which grew by 561 000 between the third quarter of 2008 and the third quarter of 2009, to reach1 632 000 – 5% of people of working age.

The transformation of active job seekers into discouraged no-hopers puts a significant long-term constraint on the improvement of the labour market, as amongst this segment whatever little skill people might have had is eroded.

We know that South Africa is the most unequal nation in the world, a grim record which we have inherited from the apartheid economy, which was characterised by massive inequalities and uneven development across industries and regions. However, there are five basic fault-lines that the apartheid economy created, and which still wait to be overcome by the national liberation movement:

a) Inequalities in education quality and access;

Of the 1 550 790 South African children who started school in 1998, only 551 940 of them registered for the matric class. That is a dropout rate of 64%. Of these 551 940 who wrote matric exams, only 334 609 (60.6%) passed matriculation and just 109 697 achieved university entrance.

So 1 216 181 of the original 1998 intake are left with no qualifications and, given the current rate of unemployment, no jobs, no hope and no future. No wonder there is so much crime and other social ills such as the collapse of family values, the spread of HIV/AIDS, etc.

12-year olds in South Africa perform three times worse than 11-year olds in Russia when it comes to reading and 16-year olds in South Africa perform three times worse than 14-year olds in Cyprus when it comes to mathematics. Nevertheless, white South African learners perform in line with the international average in both science and mathematics, which is twice the score of African learners.

b) Inequalities in healthcare

A black female South African has a 7.2% chance of dying in the first year of her life, whereas the white male has a 3% chance of dying in the same time. She can expect to live 12 years less than the white male. An average male Swede can expect to live 30 years more than an average black South African female.

The life expectancy of South Africans was the highest in 1992, at 62 years. It fell to 50 years in 2006. Although we rank 79th globally in terms of GDP per capita, we rank 178th in terms of life expectancy, 130th in terms of infant mortality, and 119th in terms of doctors per 1000 people.

c)Inequalities in housing provision

1.875 million households still live in shacks, which amounts to 15% of all households. Despite the progress in the provision of dwellings, the quality of housing remains a major challenge. 46% of households live in houses with no more than 3 rooms, 17% of households live in 1-room dwellings. 55% of Africans live in dwellings with less than 3 rooms, while at least 50% of white households lives in dwellings with no less than 4 rooms. These disparities in the conditions of living are a direct consequence of the legacy of apartheid, and the accumulation path that underpins it.

d) High, racial- and gender-structured unemployment

The key drivers of unemployment are race, gender, location and education. Among Africans it is 29%, for coloureds 22% and for Indians 13%, but for whites it is 5%, which is comparable to the levels in advanced economies. The rate of participation of Africans in the labour force is 52% and for whites it is 68%. Among Africans of working age (15-64 years), only 36% are absorbed into employment whilst 65% of Whites of working age are absorbed into employment.

e) Deepening income and wealth inequalities.

An average African man earns in the region of R2 400 per month, whilst an average white man earns around R19 000, an income gap of roughly R16 800. Most white women earn in the region of R9 600 per month, whereas most African women earn R1 200, an income gap of R8 400. The race gap is therefore overwhelmingly severe, especially among males.

90% of the people who have no income at all are African, while only 5% are white. Yet of those who earn in excess of R2.5 million, 58% are white and 30% are African. In other words, 58% of those who earn more than R2 million per annum are drawn from 12% of the population. In addition, 56% of whites earn no less than R6 000 per month whereas 81% of Africans earn no more than R6 000 per month.

A study of CEOs’ remuneration packages of the CEOs of 326 listed companies and parastatals, Philip Theunissen, from a firm of forensic and financial accountants, has revealed that the average basic salary of the CEOs was R2.37-million a year, while the average worker earned R124 457.00 a year over the same period, according to Statistics SA.

CEOs still earn twice as much on average as the president of the country and three times more than cabinet ministers. They earned ten times more than a director general in 2009 while they 106 times more than a cleaner in the public service for the same year.

78% of the CEOs earned more in a month than what the average worker earned in a year. In 2009, it took just about three months on average for a CEO to earn a million rand while it will take the average worker eight years to earn the same amount.

In all these aspects of our economy and society apartheid fault lines remain. We have unintentionally accepted a situation in which ‘reconciliation’ has in reality meant reconciling the black majority with poverty, unemployment and inequality.

We made this reality even worse by uncritically and wholly embracing neoliberal approaches to transformation, prioritising macroeconomic stability over industrialisation, adopting first-world fiscal and monetary policies and ignoring the fact that we are a developing nation with huge unemployment, poverty and inequality.

Is it any wonder that more and more workers, like those at Transnet and Prasa, are quite rightly demanding above-inflation increases in their wages? That is why we are totally in support of their strike by SATAWU and UTATU members and will back any other workers who follow their lead.

And we shall certainly not drop our demands because of the World Cup. We are the biggest supporters of the World Cup and greatest fans of Bafana Bafana, but will not let the bosses and their media blackmail us into surrendering our right to take action in defence of our jobs and living standards.

We have decided to hold a wage policy conference later this year or early in 2011, which will hammer out a clear set of demands to confront the massive wage differentials between workers and senior managers. We shall call strikes to demand true affirmative action and employment equity. We shall demand mass skilling of the working class. We shall make it clear that we are selling our labour, not our lives and limbs!

We are also proposing to hold a conference to launch a new Living Wage Campaign on a scale not seen before in this country. It will dramatically step up the fight for better wages and conditions, job security and an end to casualisation and labour broking,

We are also campaigning for the rapid implementation of IPAP2, while arguing that it will not be achieved if there is no synchronisation and coordination with macroeconomic policies. The fact that our currency is overvalued and volatile undermines our country’s ability to export goods competitively.

We shall keep arguing for lower interest rates to make adequate finance available for productive industries. The manufacturing sector cannot invest to expand production so long as the banks and development finance institutions have an iron fist approach to interest rates.

COSATU will soon be releasing its growth path document and we note that the government will be releasing its own growth path document during June. This is where we should have started few months after the 1994 breakthrough. But it is better late than never! We urgently need an overarching developmental strategy buttressed by the IPAP2 for us to develop guided by a map.

In short we need a new campaign to ensure that the benefits of the economy are shared so that we can realise the Freedom Charter demand that the wealth of the country must be shared amongst all who work it. When we do so we shall not heed those who will shout at us in the sidelines. We shall not continue to tighten our belts and die of diseases associated with poverty, whilst a few are dying of diseases associated with over-eating and opulence!

I wish your campaign well and promise that COSATU will be fighting with you all the way until we achieve victory. Amandla! Aluta Continua!

Patrick Craven (National Spokesperson)

Congress of South African Trade Unions
1-5 Leyds Cnr Biccard Streets
Braamfontein, 2017
P.O. Box 1019
Johannesburg, 2000
South Africa

Tel: +27 11 339-4911/24
Fax: +27 11 339-5080/6940/ 086 603 9667
Cell: 0828217456
E-Mail: patrick@cosatu.org.za