The wage negotiations at ESKOM, South Africa’s state owned electricity monopoly, reveals that the Ramaphosa presidency has set for itself the task of restoring the political dominance of white monopoly capital (WMC). It also illustrates how the political orientation of the trade unions assists in this task by pushing to the side-lines the majority of the working class, including Black women in working class communities, the unemployed and precarious, contract workers.
At the time of writing the talks have deadlocked again. Eskom is offering a 7.5% increase for 2018 coupled with 6.5% for 2019 and 6.25% for 2020. The unions, on the other hand, were demanding 8% for 2018 and a once-off bonus of 12% of the yearly income of the workers among other things. When the company management refused to give in to their demands, the unions called on the ministers of finance and public enterprises to intervene. Minister of Finance, Nhlanhla Nene, promptly responded by issuing a challenge to the unions to meet him not only as unions making demands, but also as taxpayers who can explain to them how the government and ESKOM can come up with the money to afford to meet the demands of the unions.
ESKOM in the conflict between capitalist factions
ESKOM’s importance to the mining and finance sectors has always placed it at the heart of South Africa’s economics and politics. It is no coincidence that ESKOM became the crucial battleground in the struggle between former President Zuma and his allies, on the one side, and white monopoly capital and their allies on the other side. The essence of this struggle was that members of the aspirant Black capitalist class became dissatisfied with deal the ANC had made with the white owners of the economy in the 1990s. The deal struck in the 1990s was that WMC would continue to own and control the upper echelons of the economy including mining and finance, while facilitating the participation of selected Blacks like Ramaphosa through Black Economic Empowerment. In terms of this agreement, ESKOM would continue to serve the big mining and finance companies such as Glencore and Anglo American.
When Zuma and the Guptas started encroaching on mining and banking and pushing out the Glencores and Anglo Americans from ESKOM, it precipitated the political-economic-legal battle that split South Africa’s body politic and elite. Ramaphosa emerged as the leader of the WMC aligned faction and his winning of the ANC and State presidencies represented major victories for this faction in the still on-going battle.
The stance of ESKOM’s management and their political heads such as Finance Minister Nhlanhla Nene in the wage negotiations is a continuation of this battle. It is not just about the specific level of wage increases. It is about re-establishing that the expenses and operations of ESKOM have to be justified within the current framework that governs the finances and policies of the state. This framework is an extreme version of neoliberal capitalism, with its commitment to policies that distribute wealth from the poor to the rich such as ‘fiscal discipline’, ‘fiscal consolidation’, inflation targeting, deregulation, financialisation, privatisation and cost recovery. The unions are now required by Nene to justify their demands in a framework designed to move wealth from the poor to the rich, which has made South Africa the most unequal country in the world.
The trade unions turn to neoliberal politicians
It might seem strange that the trade unions would turn to Nhlanhla Nene and Public Enterprises Minister Pravin Gordhan, who are known as key leaders of the neoliberal political project and close allies of white monopoly capital. However, they are acting consistent with their past behaviour and with the specific place of the trade unions in the social compact between government, business and labour. Solidarity and NUM (National Union of Mineworkers) openly supported Cyril Ramaphosa and Pravin Gordhan in their fight with Zuma. NUMSA (National Union of Metalworkers of South Africa) did not do so, but they have a position that overlaps with that of NUM and Solidarity when it comes to the place they occupy in the social compact as it works at ESKOM.
The trade unions are based on a membership of permanent workers with noticeably better wages, job security and benefits than the majority of workers in South Africa. Part of the reason for this is that unions find it more convenient to recruit members from this group than from their more precarious counterparts. Another part of the reason is that the unions were strong in the run up to the mid-1990s and were able to secure these benefits for their members as part of the social compact.
The problem is that these rights and benefits were won within the neoliberal framework that defined the social compact. So while union members were spared some of the worst effects of privatisation, cost recovery and the rest of the neoliberal policy framework, they were not able to stop it. The people who faced the full impact of neoliberal ESKOM were Black women in working class communities, the unemployed and precarious, contract workers. It can therefore be said, that the trade unions negotiated these deals for their members, at the expense of the poorer sections of the working class who were not represented in the negotiations.
The trade unions, however, will no longer be able to defend their members from the effects of neoliberalism. The very neoliberalism that determined the relations of the unions to the broad working class has undermined the strength and bargaining power of the unions. The state-capitalist elite no longer needs to keep the peace with the unions in the same way. They will therefore continue to take back the concessions they were forced to give when the unions were strong. Even if there is a wage agreement at ESKOM, it will immediately be followed by retrenchments and privatisation.
This will hit union members hard, but it will hit the rest of the working class as hard or harder. Electricity prices will continue to rise, service delivery to poor households will continue to drop, and contract workers will face more wage freezes and uncertainty. The women-led struggles of Black communities and precarious workers against ESKOM and the mining-energy-finance-state complex will intensify. If the unions continue to turn to neoliberal politicians instead of building alliances with the broad working class and these struggles, they will continue to collapse as both a force to be reckoned with and an agent for social justice.
Ronald Wesso is an activist and works at the Casual Workers Advice Centre.