Report busts the labour cost myth
PARKTOWN – An abridged version of a new report that sheds light on the question: “Can the platinum producers (Amplats, Implats and Lonmin) afford the wage demands of striking workers?” has been released.
The full report, titled Demanding the Impossible? Platinum Mining Profits and Wage Demands in Context, was launched by Wits University’s Society, Work and Development Institute.
Authors Andrew Bowman, visiting researcher from the University of Manchester’s Centre for Research on Socio-Cultural Change, and Gilad Isaacs, part-time researcher at Wits University’s Corporate Strategy and Industrial Development research unit, presented the findings.
The report does not provide a conclusive answer to the question of affordability, but rather broadens the terms of the debate with an historical view of labour costs and profits in the 13 years preceding the strike.
The longer-term view analyses the returns made by the platinum producers over the last 13 years and calculates the cost implications of the demands made by the workers, through their union, Association of Mineworkers and Construction Union (AMCU).
The report finds that platinum producers made enormous profits between 2000 and 2008. During this period labour received a very thin slice of the pie, garnering, on average, just over half the South African norm for labour’s share of value added. Meanwhile, shareholders and executives took home huge sums in dividends.
The report goes on to show that the producers’ offer is far less generous than they profess, and that the demands of the workers are far less costly than the producers claim. It then offers a counter-factual example of the cost of AMCU’s wage demands put alongside the dividends paid to shareholders over the 13 year period.
The report concludes by raising wider questions of how workers and South Africa at large can best benefit from our mineral wealth.
To read the report, visit: www.researchonmoneyandfinance.org
