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A right to strike!?

January 10, 2013 in Economy

We are flooded with news articles regarding labour unrest in almost every sector of the economy. According to news reports the workers have a right to strike action and trade union leaders call on us to respect their right to do so. But where does the money come from to pay for the luxury of such rights?

Many join in to support the plight of the workers and they make headlines in the news media. But the entrepreneurs and business owners who must fork out the money to keep their businesses afloat while production comes to a halt, is also expected to be ready and able to re-employ and pay increased wages when the workers decide to return. Unfortunately there is often no business for the workers to return to.

When I studied Economics at University ±1990 the unemployment rate in South Africa was at approximately 7%. By mid 2012 it was approaching the 25% mark. Since mid 2012 we’ve heard that one of our big gold mines are still considering whether it will be worthwhile for them to re-open the mine after the huge losses they incurred during the 2012 strike action. A news headline today reads “Mining, manufacturing sector loses 15000 jobs in December.” The strike action also spread to the transport industry and combined with the strike in the mining sector caused the biggest transport company in the country to close its doors and left another 750 people unemployed.

In our town many business premises are vacant even in the most sought after areas where previously such premises almost never became available. My son who works at a company with offices in an office block in the so called golden mile near Tyger Valley shopping centre  in Durban Road, Bellville, told me last week that only two companies still occupy office space in the whole office block. He mentioned that where it used to be difficult to find a parking space, you can now pick and choose where you want to park. Therefore it seems to me that strikers’ demands are really inappropriate for the existing economic climate.

When socialist President Francois Mitterrand became president in France in 1981 in coalition with the Communist Party, he immediately set about putting a Marxist-inspired stamp on the country. Their goal was to turn France away from capitalism towards a state-dominated, centrally planned economy. With the communist ministers and his own socialist ideologues watching over his shoulder, he spent a year dutifully applying their left-wing platform.

Just as his critics predicted, it flopped. The Paris stock market fell by 14 percent and soon inflation and unemployment surged, capital fled abroad, the trade deficit swelled, and the franc was devalued three times. But “only imbeciles never change their minds” goes an old French proverb, and Francois Mitterrand did just that.

The chief political casualty was to be the Communist Party. Some years later, the franc was strong, inflation had been throttled, the Communists were out of the government and the Socialists themselves have taken on an air of moderation. (Readers Digest; August 1990)

Also President Boris Yeltsin when he came to power in Russia in 1991 set the following objectives to grow the economy:

  • Establish full property rights and privatize state industry.  The entrepreneur will become the chief actor in the economy.
  • Eliminate all governing functions of the Communist Party, forcing it to compete with other political parties.
  • Give republics (provinces) more power.

Boris Yeltsin also called for an end to the miners’ strikes. Looks like some political will and leadership to me. (Readers Digest; July 1991)

If we have such lessons that we can learn from history, why should we follow the same downward spiral. I believe entrepreneurs and business owners should receive much more support and their role in the economy should be admired and respected. Too often we want to put the blame for many wrongs at their door, instead of thanking them for the courage they have to be risk takers and job creators.

You only get to know where money comes from when you need to pay the salaries and wages. You look forward to the end of the month only when you receive the salary. Do you know what it is like to see only ten thousand rand in your bank account when you know that in a week’s time you need to pay salaries and wages to the value of one hundred and twenty thousand rand? I can assure you, you really do not look forward to the end of that month. And don’t say it’s bad management. Any entrepreneur knows that such things happen.

And then your employees decide to join the strike! That is when the business owners would really like to see political leadership that would support them in order to protect their businesses and the jobs they have created. Without support from government another business may bite the dust and more people be unemployed.

Let us hope and pray that the government will start to look beyond political ideology and racial prejudice and rather focus on the well-being of those who try to create jobs and build the economy. They are the only hope for real growth in any economy. The entrepreneurial spirit has no racial prejudice and cannot afford to strike.

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