AMCU, corporate pay and skills

We have this ghastly situation that continues to fall into the category of unsolvable for the time being along the platinum belt in South Africa. 100 odd days ago, newer mining union AMCU decided that they would draw a line in the sand and demand a minimum wage of 12500 Rand for the rank and file employee and they have stuck to that number, despite numerous rounds of negotiations.


I was most interested to see an opinion piece by none other than former spokesman of the National Union of Mineworkers, and now employed by an academic institution, the University of Kwazulu-Natal titled Amcu, the 'suicide bombers' of mining. I really do not agree with all of it, but he does make some good points. I see at the same time in Australia that overpaid associated mining industry workers at Port Headland (Iron Ore port in Aussie), the tugboat Maritime Union of Australia members want more. Understandably right? We all want more.


Deck hands (according to this article -> Australian iron ore trade faces labour unrest as boom fades) earn 135 thousand Aussie a year with the work cycle being four weeks on and four weeks off (every single day) want four weeks annual paid leave. Deck hands want their pay hiked to 70 percent of that of what tug boat masters earn, 220,000 Aussie a year is currently the salary. So, they want 154 thousand Aussie, 12.8 thousand Aussie a month. Which at the current exchange rate of 9.67 Rand per Aussie Dollar, that is 124 thousand Rand a month for Deck hands on tug boats, who would work 12 hours a day for four weeks straight. Of course societies are all different, eduction for starters in Australia is good. Not quite as good as South Korea (the best), but they rank 15th in the world (source -> Pearson always learnings), we do not even make it into the top 40.


But does that simply mean that if you live in a society which is more equal and more educated and has a higher standard of living that your salary should just be adjusted to meet what the workforce would term reality? Should a tug boat hand in Aussie earn ten times more what AMCU are demanding here? Because AMCU are told that their demands are unreachable. The truth is, and this hurts, the tug boat workers did not create the demand for Iron Ore in Western Australia, neither did the Western Australian government. If there are only 14 tugs (source -> About Port Hedland - Shipping Information - Towage Fleet), how many people can there be working as deck hands? The point is that everyone is worth something, we are all commodities essentially. But the point about quality of the employee (skill set and productivity) relative to what they earn, is that ultimately down to the shareholders?

The whole idea that only shareholders should have the ultimate say is kept in check and balance by the regulators and broader society. As Amplats CEO Chris Griffith said yesterday, there is no way in a public forum that he is going to win a debate on corporate remuneration. If you look at the 2013 Annual report for Amplats, page 61, you will see that remuneration for executive directors and prescribed officers reached 100 million Rand. The base salary for Chris Griffith was 6,747,404 Rand (he paid a lot of tax on that, but most people would not mind that problem), with his medical and retirement benefits totalling 1,172,007 Rand. That is all laid out in the report, for all to see.


Also there for all to see is that the company pages salaries of 13.052 billion Rand in 2013, and retirement benefits of 1.074 billion Rand. As well as medical aid benefits of 524 million Rand. All in all employees of the company earned 15.152 billion, plus I guess the departing ones made 874 million in severance packages, you should add that in too. On the wages and benefits (page 39) the total is 15.6 billion, let us use that number then. Total number of employees and contractors? 46,139 employees and 14,528 contractors, 60,667 souls in total earned that money. The shareholders parted with that, in return for a workforce sweating their assets. Simple math means that before any deductions, the average salary at Amplats is 21428 Rand a month. Average. But surely there is a massive difference in skill sets between a senior engineer, a surveyor and a rock drill operator. And by extension earnings power, the market sets that.


The worst part in South Africa is that you have skills, race and class lines drawn as a function of the past, that stinky word that all of us wished did not exist, apartheid. The reality is that we are straddled with the inequalities of the past, white and black, still open for all to see. But if it did not exist, then the lines would not be drawn along race. More likely class, it would be a simple class struggle. The worst news however for labour is that mechanisation is a given. And the best part for those with remaining jobs is that they will be paid more as a result of their skill sets. Which means unfortunately that the least well paid, least skilled and therefore must vulnerable in society will be most affected. Sad, but quite probably true. Education changes everything, and that is probably why the department of lower and higher education is possibly more important than at any other time in our history.