Inequality in the workplace is targeted in the Employment Equity Act 1998 by requiring the elimination of ‘disproportionate income differentials’. Schedule EEA 9 mentions six equivalent occupational levels and refers to a semantic scale, Paterson, Peromnes, Hay and Castellion. That schedule and those six levels are based on structures that were created 40 years ago with a completely different objective in mind (to prevent Africans from doing skilled work). Adding just one level and ensuring true proportional income differentials will go a long way towards solving many problems of inequality.
Adam Habib’s article SA has competing policies on creating greater equality first appeared in Business Day today and the link is to BDlive. He argues that
Only a serious agenda of tackling inequality and poverty is likely to establish the possibilities for a social pact and recreate the circumstances for stable and sustainable economic growth.
In an earlier post ‘Two-tier system – what about equal pay for work of equal value?’ it was suggested that the following initiatives be adopted
- Translate existing experience (and cost levels) of individual employees into more senior job levels to improve performance and increase productivity.
- Encourage individual employees to grow their abilities to add value and progress up a defined reward structure.
- Withstand the pressure to resort to coercive industrial action to ‘win’ an additional 1% or 2% upward adjustment on a minimum wage.
- Take the purpose of the Employment Equity Act 55 of 1998 to the lowest occupational levels of employment.
Read the entire article of Adam Habib by clicking on the links but here are some random extracts.
INEQUALITY is the new buzzword in South Africa. It is on the lips of everyone from politicians to businessmen, populists and even conservative economists. Addressing inequality is ostensibly the primary goal of the government and is stipulated as such in the New Growth Path (NGP) and the National Development Plan (NDP). Not a day goes by when even Business Day does not mention the addressing of inequality as an urgent national need.
This focus on inequality must be welcomed. After all, for much of our post-apartheid history, the African National Congress (ANC) government’s focus was more on poverty alleviation than on the reduction of inequalities.
Instead the “poor” are the unemployed, who represent the underclasses and the truly disadvantaged. Packaging data in a methodologically questionable way that combines the social categories of the extreme rich, the upper, middle and working classes, to constitute a single category of “the privileged”, Schussler then essentially makes the case for why the extreme rich and the corporate elite must not be targeted for any sacrifices in addressing our collective challenges of poverty and inequality. He concludes by urging the political elite to explain to workers that they are the privileged, which he believes will then lead them to accept their circumstances and not engage in illegal strike action.
Even if one ignores the methodologically questionable marshalling of statistical data evident in this article, its conclusion has to be questioned. After all, this argument ignores a significant amount of social-science research of the past 40 years that has convincingly demonstrated that it is not poverty, but rather inequality, that creates the social ferment required for revolutions.
Workers and the poor in South Africa are experiencing what sociologists and political scientists have come to refer to as relative deprivation. This means workers and citizens are essentially angry because they believe that the benefits of South Africa’s transition to democracy have not been equally shared. Instead, they feel that the traditional apartheid economic elite, together with the new political elite, have monopolised the benefits of the political transition.
Only a serious agenda of tackling inequality and poverty is likely to establish the possibilities for a social pact and recreate the circumstances for stable and sustainable economic growth.
But the failure to internalise an understanding of what it means to address inequality is not limited to the musings of conservative private-sector economists. It is also evident at the heart of the state and the policy establishment. Perhaps the best way to demonstrate this is by reflecting on the two most important policy documents of the Zuma era: the NGP and the NDP.
While the former is focused on the economy, the latter, we are told, is more broadly focused and covers a diverse set of sectors. While the former has a 2020 timeline, the latter is projected as merely intending to realise its goals by 2030. The NDP also explicitly stipulates that its objectives complement the goals of the NGP. But the difference between these policy documents is much more than merely focus and timelines.
There is, of course, much overlap between them. Both are directed to increasing the livelihoods of the poorest in the society.
Yet, on addressing inequality, there is a fundamental philosophical difference.
The NGP hopes to address inequality by both expanding livelihoods at the bottom, and containing enrichment at the upper end of society.
It hopes to achieve the latter through an incomes policy (inclusive of managerial and executive remuneration) and by redirecting black economic empowerment in a broad-based direction. The NDP, by contrast, is supportive of the expansion of livelihoods at the bottom end but is silent on containing enrichment at the upper end of society.
The NDP seems to imagine that it is possible to bring down economic inequalities simply by growing the economy, driving employment and addressing poverty. This latter view is shared by mainstream business, its economists and aligned research agencies.
Even if it is uncomfortable to do so, is it not necessary for us to starkly pose the essential challenge that confronts both the economic and political elites in our society: do we have the collective political will to truly address our extreme inequality?