A Contribution: A Living Wage or Minimum Wage?

At the Freedom Day Rally (27 April 2018) in Bloemfontein, President Ramaphosa stated that the national minimum wage of R20 per hour is not a living wage. For him and the ANC government, the minimum wage is a start that will lead the working class onto the path of a living wage. His statement is a direct response to the mass marches on 25 April 2018 and the rejection of R20 per hour by workers. But here Ramaphosa is merely echoing the view of COSATU. COSATU also makes a separation between the national minimum wage and the living wage. For COSATU the minimum wage is a springboard, a stepping stone to a living wage. The minimum wage promotes a living wage. It is part of a package of reforms to reconfigure the wage structure and to overcome the apartheid cheap labour regime.

However, SAFTU, NUMSA, GIWUSA, CWAO and other organisations oppose not only the R20 as a minimum wage but also called for a living wage. SAFTU and NUMSA put forward a living wage of R12 500 per month. GIWUSA and CWAO called for the determination of the level of the living wage – the actual figure of the living wage – to be done through a process of popular participation. Though they differ as to how the process of determining the level of living wage is to be undertaken, these organisations make no separation between the living wage and minimum wage.

Our response to and rejection of this shared view of COSATU and Ramaphosa should make clear the theoretical premise as to why there is no separation between the minimum wage and living wage. Clarification of the theoretical premise would arm militants to respond to the propaganda of the ruling class and assist in advancing the class consciousness of the fighting battalions of the working class.

The purpose of this article is to make a contribution to the development of a theoretical basis for our conception of a living wage.

But first: A Historical Detour

The distinction that COSATU is now making between the living wage and minimum wage is not something new – there is long history to this dichotomy between a living wage and minimum wage. In the early 1980s the then labour movement’s conception of minimum wage levels was that these had to be the living wage. In 1981 FOSATU (the forerunner to COSATU) in its “Policy of a Living Wage” counter-posed the concept of a living wage to the poverty wages and wage levels proposed by the ruling class bodies of the time. The Bureau of Market Research at UNISA had came up with the Minimum Living Level, and the Institute of Planning Research at the University of Port Elizabeth advocated the Household Subsistence Level. FOSATU was opposed to the views of both these institutes. COSATU, following in the tradition of FOSATU and others, announced at its founding conference in 1985 that there should be a campaign for a national minimum living wage, and thus the Living Wage Campaign was launched in March 1987.

From the beginning of the Living Wage Campaign COSATU understood that the struggle was the only means of attaining a living wage. Importantly COSATU emphasised that the struggle for a living wage is not confined to workers and not a narrow union campaign, but a struggle which involved the whole working class. This is what COSATU said then:

 “Every wage struggle; every struggle against increased costs; every fight for shorter hours and paid maternity leave and job security; our struggle for May Day, June 16, and Sharpville Day; our struggle for decent education and training; for an end to tax deductions and hostel system – are all part of our struggle for a living wage.

 All are needs that millions of workers and youth have. All could be fought for together – instead of some of us fighting on our own in isolation form our mass class strength. Our living Wage Campaign is the place to put our struggle together; to put all our energy together, to say with one voice ‘UNITE AND FIGHT FOR A LIVING WAGE’.”

Around the early part of 1990s, however, the viability of the living wage demand was being challenged in the labour movement. It was argued that the demand for a living wage is not viable as a short-term demand. Rather, workers must fight for national minimum wage as distinct from a living wage. The Labour Research Services (LRS), in a paper entitled, A National Minimum Wage: Stepping Stone to the Living Wage (1990), argued for a national minimum wage as a short-term demand. This view was informed by the search for “realism” as it was argued that a national minimum wage would provide a “realistic and popular target” for the majority of workers. It also argued that the COSATU’s Living Wage Campaign suffered from serious weaknesses, hence the need for “realism”. Unfortunately, the view of the “realists” found an audience amongst the leading bodies of COSATU and it shifted from its original conception of a living wage.

At least part of the considerations of the “then-realists” were to address the weaknesses of the COSATU’s Living Wage Campaign that existed at the time. For them the national minimum wage would unify union wage campaigns, build a united front between high wage and low wage industries and provide a basis for unity within decentralised companies and thereby overcome the weaknesses of the Living Wage Campaign.

COSATU of 2018, however, has no time for such lofty considerations of the need for struggle and balance of forces. In its quest to survive and to be relevant to its masters COSATU has become completely immune to the requirements of class struggle. It is now in the business of making unprincipled deals to protect its turf and positions within the labour market.

The theoretical basis: No separation between Living Wage and Minimum Wage

To contribute to the development of a theoretical basis for the concept of a living wage one has to analyse how wages are determined and here one turns to Marx’s theory of wages for assistance. The workers are owners of a commodity, i.e. labour power – the capacity to perform labour. It is this capacity to labour – labour-power – that the worker sells to the capitalists in exchange for a wage. However, Marx distinguishes between the value and price of labour-power. The price of labour-power is the wage, which fluctuates as a result of the relation between the supply and demand of labour-power in the labour market. The value of labour-power, on the other hand, is that average quantity to which the actual wages adjust itself in the long run and is independent of supply and demand. So in the long run the wages of workers are adjusted to the value of labour-power.

The question that then comes to mind is: How is the value of labour-power determined? Karl Marx said:

“The value of labouring power (i.e. wages) is formed by two elements – the one merely physical, the other historical and social.”

With respect to the physical element, for Marx “Its ultimate limit is determined by the physical element, that is to say, to maintain and reproduce itself, to perpetuate its physical existence, the working class must receive the necessaries absolutely indispensable for living and multiplying”.

Today, as in the past, bourgeois economists and even progressive researches try to present a “scientific basis” to the determination of the “subsistence levels”. But despite their “scientific surveys” they always disagree as to what the exact figure is. Also, when calculating the “subsistence levels”, they invariably narrow it to the physical level. The so-called panel of experts, including professors of economics, advised COSATU and the ANC government that the level is R20 per hour or R3 500 per month was adequate to reproduce the worker. The National Minimum Wage Research Institute says that the subsistence level (working poverty line) necessary for the reproduction of the worker is around R 4 750.

But they all forget one thing: that the actual level at which wages, and even the “physical limit” component, is determined is a product of struggle. As Marx argued, at certain times, the capitalist can push wages below the physical minimum as long as labour for the factories is available. Only the relative strength of capitalist and workers settles the actual physical limit.

The physical limit is only one component that ‘determines the level of wages’. The second element is what Marx called the “historical and social” element. Marx went on to explain:

Besides this mere physical element, the value of labour in every country is determined by a traditional standard of life. It is not mere physical life, but it is the satisfaction of certain wants springing from the social conditions in which people are placed and reared up”.

In all capitalist countries, including South Africa, the social conditions of the different classes differ widely. Their “traditional standards of life” are not merely derived from the level of economic development of the country. Yes, the economic development forms a basis for establishing these standards. But the different standards arise from how the wealth produced is shared among the various classes. The distribution of the produced wealth is the direct outcome of relative powers of the various classes. In other words, it is a product of class struggle. The struggle for a living wage involves nothing but the working class trying to impose its agenda on the distribution of wealth. And inevitably in the struggle for a living wage the interests of society’s two contending classes come into conflict: those of capitalist class and those of the working class. The only historical scientific method is one that puts an understanding of the dynamics of this class conflict at the centre of determining the figure for a living wage.

This perspective is reinforced by Roman Rosdolsky, an activist and Marxist theoretician,

“But is it in fact simply a question of ‘natural’ needs and are these identical with the ‘necessary’ needs in the sense used in political economy. Political economy is of course a social, not a natural science. As a result it does not ask which needs are necessary ‘in themselves’, or from the standpoint of physiology, but rather which needs correspond to the ‘traditional’, socially given, way of life of the worker in a particular country at a particular time. In fact, ‘the number and extent of his so-called necessary requirements, as also the manner in which they are satisfied, are themselves products of history, and depend therefore to a great extent on the level of civilisation attained by a country; in particular they depend on the conditions in which, and consequently on the habits and expectations with which, the class of free workers has been formed. And we would add to that that the extent of these needs also naturally depends on the demands which the working class raises and succeeds in achieving in its political and trade union struggles against the capitalist class, providing that they can be consolidated, and are not merely achievements of a temporary nature. In this sense Marx expressly stresses the ‘historical and moral element’ which enters into the determination of the value of labour-power.”

The analyses of the minimum and living wage by all the so-called “scientific” methods fail because they do not incorporate these crucial elements – that of the physical limits that determine the value of labour power combined with the ‘historical and social element’. These two elements link up with, and are expressed in the strength of workers’ organisations and the level of consciousness of workers.

From our analysis it is clear that the minimum wage cannot be separated from a living wage. Once the two elements are combined – the physical and the social and historical, there is no basis for a separation of the minimum wage from a living wage. The balance of forces between the working class and the ruling class determines what workers receive in the form of wages. Therefore, the living wage cannot be determined empirically and “scientifically”. And a figure arrived at through mobilisation and struggle will be a living wage as it will incorporate both the consideration of the physical limit and the historical and social element. It will best reflect the strength and confidence of the working class, and its consciousness and aspirations at a given stage of the class struggle.

How is the figure of the living wage to be determined?

Having a conception of the national minimum wage as being the living wage means it has to arise out of a process of mobilisation within the working class and poor. It is the dynamics of the class struggle that would determine the level of the national minimum living wage. And here it is the responsibility of the most militant sections of the working class to lead and set the pace in struggle.

A few years ago the rebellious miners Marikana shook the foundations of the country’s labour relations regime, its laws and institutions in their quest for a wage of R12 500 per month. Inspired by these heroic struggles other sections of the working class followed suit: an uprising of farmworkers followed; the #Outsourcingmustfall movement demanded a R10 000 per month wage. The militancy and heroism of the Marikana workers raised the level of consciousness and the militancy of other layers of workers. They set the tone for the struggle for a living wage.

From concrete experiences we have seen that the class struggle is at the centre in the conception of the national minimum living wage, and the figure that workers rally around is directly inferred from the militant section of the working class in struggle. These sections in struggle directly inspire all workers (unionised and non-unionised, employed and unemployed) and rallies them behind them.

We should recognise that what constitutes the militant sections cannot be deduced empirically or on the basis of current wage levels but on the workers’ own preparedness to struggle. And of course, there is no guarantee that in the struggle to set the pace, the militant sections will not be out of step with the mood and organisational preparedness of the rest of the proletariat. The struggle of the militant sections to lead is not a harmonious relationship. Sometimes the masses are receptive to their calls and demands but at other times these are rejected. Different levels of wages were articulated by the rebellious mineworkers, farmworkers and #OMF workers. It is the duty of the layers in the forefront to try and connect up the with the lagging sections, and at the same time harmonise their calls and demands.

Now both SAFTU and NUMSA have pegged the living wage at R12 500 in line with the demand of the Marikana mineworkers. Whether this is in step with the mood and preparedness of the rest of the working class can only be tested in struggle. In fact, there would be nothing wrong if the militant layers admit that a certain demand was unrealistic as it did not take the strength of the class into consideration when formulated. It would be in keeping with their responsibility to admit that they were out of step with the rest of the class and to try and set a demand that proceeds from the existing consciousness and preparedness of the masses.

In moving forward SAFTU has to test the preparedness of workers to struggle for the R12 500 as the legislated minimum living wage. A concerted mass-based campaign must anchor the struggle for this living wage and it must be directed at the state. And if in the process of this struggle and testing out it is found that indeed the pace setters are out of step with the rest of the class then adjustments are not out of place. This would not undermine the theoretical premise that is the class struggle that is the arbiter in the setting of the level of the living wage.

What is critical, however, is that the struggle for a living wage must be put on the agenda of immediate and concrete struggles. Our task now is the conceptualisation of such a living wage campaign.


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