Since when did the right to strike become more important than the right to work?

by , 15 July 2014

South Africa is heading down a dangerous path.

One described as rampant and uncontrolled unionism that if not halted, will become unaffordable.

For five months, Amcu lead crippling strikes in the platinum sector. A strike that won workers about R36,000 over three years, but cost them R52,000 in lost wages.

Then as soon as the platinum strike ended, NUMSA announced it would strike. And already we're seeing car manufacturers like BMW SA, Toyota, Ford and General Motors halt production.

And all this will come at a massive cost to the South African economy and the employment situation.
 
In South Africa having a job is a privilege

You see, I believe that under the guidance of power hungry union leaders, a large chunk of the South African working class have forgotten that in South Africa, work is a privilege.

Official stats put unemployment at more than 26%. But these stats don’t count people who’ve given up on finding work. Add these in and estimates put the unemployment closer to 33%. But those who want to work, have jobs and are willing to work are forced to stay away by workers who want to strike.  In fact, even though there are roughly 100,000 union members striking, there are closer to 300,000 people not at work. 

But government seems to simply turn a blind eye to this intimidation to avoid conflict with the unions.

And by doing so, government is telling you that the right to strike is more important than the right to work. And that is a very worrying situation…

South Africa’s strike driven economic rot has started to bite

As more and more strikes sweep across our country at an increasing rate, foreign investors are questioning the viability of business in SA.

For starters, Anglo American Platinum released a trading statement showing that first half profits would drop 96%. And it is likely the best performing platinum producer. This massive loss in profitability, thanks to strikes, has caused the company to declare that the Rustenburg platinum mines are no longer a core asset.

This means the company is unlikely to spend significant money further developing the mine. And if that happens, over time the mine will lay off workers as they become redundant.

The same story is playing out in the automotive industry…

Already after last year’s month-long metal workers strike, BMW questioned the viability and rewards of investing in SA. 

And now these new metal worker strikes have raised even more questions. They’ve caused a halt in supplies needed for international car companies to produce cars. And every day that they don’t make cars, they lose money.

And the truth is these companies don’t have to do business in SA

With emerging and developed markets the world over calling for more foreign investment and offering great incentives to foreign companies that set up shop, South Africa is not the only choice for motor manufacturers.

And should they decide to pull the plug and leave SA, the fall out will be huge.

Not only will the direct employees of these companies lose their jobs, but all the supporting industries will falter as well.

This will definitely see South Africa earn a junk rating from ratings agencies. And just about every local business will feel the bite as foreign business turns its back on SA.

So at this stage I’m hoping the union leaders see that they could cost a lot more than they stand to gain. And I hope rationality takes hold.

But I don’t like leaving my investment future to hope, so I’m looking offshore. To learn where I’m looking, make sure you read the South African Investor by simply clicking here.

Until next time,

Here’s to staying ahead of the game.

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