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Bond, Patrick (2010) Experts in the art of generating poverty. Eye on Civil Society : -.

IN LAST week's State of the Nation speech, President Jacob Zuma
displayed no appreciation of the full extent of the massive crisis of
unemployment, poverty and inequality. So concluded his main alliance
partner, the Congress of South African Trade Unions (Cosatu).

New statistics about this crisis were revealed three weeks ago by the SA
Labour and Development Research Unit at the University of Cape Town.

Income inequality increased between 1993 and 2008, reported Murray
Leibbrandt, Ingrid Woolard, Arden Finn and Jonathan Argent, and poverty
in urban areas has increased.

SA's Gini coefficient inequality measure raced ahead of Brazil's to
become the world's leader among major countries: from 0.66 in 1993 to
0.70 in 2008. The income of the average black (African) person actually
fell as a percentage of the average white's from 1995 (13.5 percent) to
2008 (13 percent).

How could a democratic government amplify apartheid race-class
inequality? It's stunning, but Nelson Mandela, Thabo Mbeki, Trevor
Manuel, Alec Erwin, Tito Mboweni - and Zuma too - deserve credit for a
feat not even the most extreme pessimist would have predicted when the
ANC was unbanned exactly two decades ago.

According to the UCT researchers, inequality is due both to rising
unemployment and rising earnings inequality - which is in turn partly
due to labour broking, i e the outsourcing of formerly secure employment
at much lower wages with no benefits.

There are 500 000 outsourced workers in South Africa, according to
industry sources, though Stats SA are using a figure of less than 40 000.

And Pravin Gordhan's Treasury confessed during parliamentary questions
last October that, To conduct such a study would require detailed data
on the number of workers involved with temporary employment services or
labour broking, the wages of these workers and some estimate for the
number of workers who would lose their jobs if labour broking were to be

Leaders of a decent society would immediately find out the answers, then
ban labour brokers, and at the same time increase state-subsidised
employment creation - especially for badly needed green jobs - for all
able-bodied workers.

But as the inequality data show, South Africa is just not that kind of
place; it's a society where the ruling party's crony capitalists ally
with those who grew wealthy during apartheid to accumulate yet more wealth.

In our own microcosm at UKZN, the implications of this system are
evident thanks to vivid lessons our administrators learned when the
great teacher of poverty, Mamphela Ramphele, experimented on UCT's
workforce a decade ago.

A committed scholar-activist of the Black Consciousness Movement, she
had to retool for a new, rather more lucrative stage of her career a
decade ago: World Bank managing director. To create poverty on the
prolific scale required at the bank, Ramphele got good training as UCT's
vice-chancellor, from 1996-2000.

According to her deputy, Wieland Gevers, Ramphele's arrival marked a
turning point in UCT's history, as the university's focus underwent a
fundamental shift. Ramphele served on the boards of several premier
corporations. She came to UCT strongly convinced that its administration
was archaic and not sufficiently informed by modern corporate practice.

The ill wind blew away the rights of already low-paid workers. Gevers
said: In corporate fashion, and with support of UCT's Council, Mamphela
outsourced many functions that were not core business.

By March, 2000, the Labour Court ruled that UCT could retrench hundreds
of non-academic staff, a process which has already left many families
homeless and fighting for survival, according to Independent's
journalist Beauregard Tromp.

As at UKZN, labour broking wrecked the lives of the UCT cleaning,
gardening, maintenance and messenger staff. Ramphele called this
pruning the tree of dead wood and inappropriately placed branches to
make way for new shoots.

Dead wood? Leonard Malukazi of the National Education, Health and Allied
Workers Union observed Ramphele firing low-income workers with more than 30 years' service: There were people who were about to retire in a year's time. Even then they didn't give a second thought to who they retrenched.

It was a brutal shock, says Malukazi. The majority of university
workers have been working to pay a housing bond and with these
retrenchments it basically means that you have entire families out on
the streets without the benefits of health care or housing allowances.

As Ramphele's salary soared in the move from UCT to the World Bank, the
workers suffered income cuts (to an average of R1 200 per month) and
lost their 13th cheque, free medical aid, housing subsidy and other

According to UCT academics Jonathan Grossman and Vicki Scholtz,
Ramphele spoke of the 'painful decision' and assured the UCT community
that the workers would be employed, retrained, and/or able to start
their own businesses. As with so many painful decisions, the pain was
all imposed on the victims of the decision by those taking it.

But the workers resisted and after more court battles, organising and
strikes, they brought their pay up to R3 400 a month and forced UCT to
adopt a code of conduct for subcontractors.

The same process has begun at UKZN because of extremely low wages -
cleaners take home just R1 000 a month, security guards R2 000 - and
exploitative working conditions, including the mass firing of 80
vulnerable cleaning workers at the Westville campus last month.

It's a dangerous game, for anger at labour brokers led to tragic
violence during the 2006 national security guards' strike. The security
industry paid pitiful wages and must take responsibility for what
happened, conceded Ramphele, in her 2009 book Laying Ghosts to Rest.

The right to work for a decent reward was violated by its exploitative

She uses a chapter of that book to justify her UCT management practices,
but somehow forgets to even mention the outsourcing of low-paid workers.

This talk-left walk-right legacy, so typical of post-apartheid
managerialism, continues to bedevil our universities; UKZN's mission
state- ment sounds very progressive.

What can change the power balance?
Zuma is apparently not to be trusted to lead SA's war on poverty
(remember that ancient slogan?).

As Cosatu observed on Friday, his speech contained nothing on the
creation of decent work, the spread of casualisation of labour and the
scourge of labour broking, and nothing to explain how he intends to
implement the 2009 manifesto commitment to 'avoid exploitation of
workers and ensure decent work' .

What Zuma did do, however, was threaten more police brutality against
the victims of his macroeconomic policies, such as was witnessed in
Balfour last week when police hunted down and tortured community activists.

Zuma also promised Eskom's partial privatisation, notwithstanding SA's
universally miserable experience with the likes of Telkom's
Texan-Malaysian partners, Suez water in Joburg, the crash of
SAA-Swissair, AES power, toll roads and Remant Alton bus deals, to name
a few.

Eskom's privatisation would ultimately wreck a crucial public national
service and we shall continue to campaign vigorously to prevent the
sell-off of a vital public asset, Cosatu replied.

The unity of consumers, communities, environmentalists and workers both
formally employed and outsourced might prevail.

But we riff-raff are up against formidable opponents from Pretoria to
Washington, including world-class experts well practised in the art of
generating poverty and inequality.

# Patrick Bond directs the UKZN Centre for Civil Society.

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