Covid-19 disruption a transformative time for workers, unions

The nature and structure of our economy has changed fundamentally as a result of the Covid-19 pandemic.

As we try to reimagine this — and especially the future of work — we have to consider a key stakeholder: the labour sector. In particular, we have to ask whether unions have the presence of mind, and the capacity, to represent the interests of workers at this time and into the future.

I recently facilitated a webinar discussing the impact of Covid-19 on the future of work. We’re all aware of the disruption caused by the pandemic and the subsequent lockdown. It has changed the way we work — including displacing jobs in the formal and informal sectors.

But it has also highlighted key problems in the way our economies and production structures are aligned.

During the webinar, I asked former National Union of Mineworkers general secretary Frans Baleni what the labour movement could have done to prepare for this moment to shield workers from the devastation, and what lessons we need to take forward.

Baleni insisted, and I agree, that unions need to learn to adapt. He argued that the rules of engagement need to evolve so unions can start factoring in how possible changes might affect the workplace, while also looking for sustainable, long-term solutions to wage agreements.

The Covid disruption has presented new opportunities for engagement. In an article published in February, the World Economic Forum notes that the “Covid-19 outbreak is disrupting manufacturing and global value chains, with consequences for businesses, consumers and the global economy”.

The article further asserts that “global value chains, which are essential engines of economic development and GDP growth, have traditionally been designed to optimise for cost competitiveness. The coronavirus underlines the need to focus on risk competitiveness as well”.

This is an important realisation, with implications for jobs. What it means for SA’s workforce depends entirely on the stance of workers and how effectively their voices will be heard.

Clearly, production needs to be restructured, and that may mean returning a fair amount of productive activity to within the borders of the country.

However, while we know that the cost of labour is an important consideration, one wonders whether labour representatives always consider this issue well.

According to the most recent Stats SA Living Conditions Survey, the three major costs weighing on South Africans’ budgets are housing and utilities (32.6%), transport (16.3%), and food and nonalcoholic beverages (12.9%).

Together, these three costs account for 61.8% of all household expenditure. For many, this percentage is likely to be even greater once furnishings and household maintenance, and miscellaneous services such as home and vehicle insurance, have been factored in.

To look even deeper into this, a December 2015 Stats SA report measuring household expenditure on public transport, said: “Households from the lowest income quintile spent a higher proportion of their income on public transport compared to households from the highest income quintile.

“More than two-thirds of households who fall in the lowest income quintile spent more than 20% of their monthly household income per capita on public transport. Less than 3% of households from the highest income quintile spent more than 20% of their monthly household income per capita ... on transport.”

Given the importance of transport costs to workers’ costs — and thus their standard of living — what discussions should labour be having with regulators and employers, both to help workers but also to take advantage of this transformative moment?

The answer is not to simply agitate for an increase in wages, which is often counterproductive. In any case, public transport has a weighting of only 2.3% in the inflation basket. Anyone who uses a taxi will tell you that this hugely underestimates the effect on their pocket.

A much deeper and more robust engagement is needed on the structure of public transport. This discussion needs to start with labour unions and their counterparts in the taxi industry, for example. Another needs to happen with the government, about how it funds and restructures public transport.

This will not only help workers keep more in their pockets, but also make the economy more competitive, allowing more jobs to return to SA.

The Covid-19 pandemic has presented us with difficult challenges, but it also gives us grand opportunities. We need to take a moment to re-evaluate.

Xhanti Payi is founder of Nascence Advisory & Research.