Tuesday, October 4, 2011

Busa and Fedusa.

They may sound like two chick-flick lovers, but if these two economic actors are encouraged to dance, they might perform a tango that could make a meaningful difference to unemployment. Dance experts will tell you though, that the tango needs passion, real synergy and being precisely in step to avoid the partners ending in a tangled mess. Labour and capital are far from that!

Busa (Business Unity South Africa) and Fedusa (the Federation of Unions of South Africa) representing bosses and workers respectively, have met and have agreed to work together to address unemployment.

“Ho-hum”, some may respond. There’s been a lot of similar talk over a number of years, not the least of which has come from Government in urging business and labour to make a greater common effort in repairing this frighteningly fraying fabric in our society. Government has little room to talk. The worst strikes this past year or so were in the public sector with the private sector being relatively free of industrial action. One can only wonder what on earth an arguably bloated Nedlac, which represents the three economic estates of Business, Labour and Government, has been doing since its inception, if it has not already established common ground in beating unemployment. After all, it was founded to “build bridges that hold the nation together”, or so its lofty mission statement says. There cannot be a greater gulf in our society than the raging river of unemployment. In turn this scourge feeds off the on-going conflict between labour and capital, and settling this conflict is Nedlac’s main remit.

One can be forgiven too for feeling that Fedusa may not make the most suitable dance partner for business. While many may perceive it to be level headed and conservative, the more radical in labour circles would give it a “sweetheart” label compared with Cosatu. Joining forces with Nactu to revive the old South African Confederation of Trade Unions (Sacotu), will give a combined membership of less than 1-million, only about half of Cosatu’s membership. In any case, Cosatu’s more radical stance, which is being fuelled by out-dated ideological rhetoric, real income disparity grievances and an inappropriately cosy relationship with the ruling political party, has so far had much greater sway on labour events, behaviour and regulation.

For all of their catchy acronyms, umbrella organisations in both labour and business will ultimately get nowhere in solving unemployment. The lack of real and tangible common resolve will continue to stymie efforts. This resolve has to be firmly based on a willingness to sacrifice quite a number of sacred cows. There was none of that in the Busa/Fedusa statement. At best it conveyed some old platitudes and peripheral action on some non-core issues.

More importantly, umbrella organisations can only create a framework. The real action has to happen where the rubber hits the road – in individual companies and other employment cells. And even this will not be effective if it does not impact on the crucial relationship between the worker and immediate supervisor where trust is ultimately nurtured.

We simply don’t have the determination of a post war Japan or Germany, or even the later South Korea and current China to solve unemployment. While some may argue that demographics and circumstances are very different, we also cannot ignore the fact that unemployment in this country is of such proportions that it could equal, or come very close to the crisis levels that those countries faced. It may indeed need a kind of labour “reconstruction plan” that challenges all current paradigms.

We may have to temper profit expectations away from “maximum” to levels more in line with the relative cost of capital elsewhere. The harmful inflexible aspects of luxurious labour laws have to be scrapped. Tax and regulatory burdens on companies should be re-examined. Pay disparities can be addressed by benchmarking pay differences to Gini type tolerance levels. If we cannot do this in one fell swoop, then let us experiment in pockets. We can apply different rules for small and medium enterprises. We can create organisations privately or jointly owned with labour that have special dispensation, including minimum employment restrictions and fortune sharing pay policies.

Compromise is only possible if one reverts to the simple mediation tactic of focusing on what unites rather than what divides. The crisis itself is an obvious one. But there are many more that can be even more profound for job creation and retention, industrial peace and company sustainability. This brings me back to my old favourites: common purpose and common fate.

The “what’s-in-it-for-me” creed has turned our current generation into a bunch of sissies, lacking the fortitude and risk tolerance of preceding generations. Today it is far easier to be a victim than to be a champion. A perfect example is our constitution which is seen as protection for victims rather than aspirations for a higher order of behaviour.

The same attitude prevails in economic activities including business and government. They are viewed as the providers of income and security rather than of service to others. This ignores the existential reality that these services exist because they serve. It does not take a giant leap of faith then to accept that they exist to serve. Behaving that way strengthens that reality. Behaving differently weakens it. It is this behaviour that builds companies to last, that moves them from good to great, and from being anonymous to iconic.

The conflict of interest between labour and capital is artificial, out-dated and inappropriate for our times. It is divisive and makes the forging of a common purpose in companies and other economic activities impossible. It also makes completely unattainable a compromise in the interest of a greater social good,

Until we achieve some semblance of common purpose, Busa and Fedusa will be dancing to the wrong music.

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