Do Trade Unions in South Africa Represent the Poor?

As trade union members received a pay rise in Marikana, Lomnin closed down one of their shafts, terminating an agreement which affected 12000 casual workers. Casual workers form an increasingly large component of South Africa’s labour force. They receive fewer benefits, are paid significantly less, and have less job security. They are not represented by trade unions. Yet, the actions of the unions directly affect them. Are the casual labourers being screwed by the unions?

Andrew Kerr published a recent working paper on pay differentials in South Africa. Andy, please forgive me for only discussing some basic descriptive statistics (which I concede are subject to some caveats). According the KIDS data on workers in Natal, it seems that trade unions in South Africa really do represent the economic elite. Only 10% of the total labour force is unionised; and they earn significantly more than the rest of the economy. Furthermore, according to this data, a shocking 40% of workers are categorised as casual. 

The Quarterly Labour Force (averaged over the past 5 quarters) show similar trends. Only 30% of those working are unionised; and only 64% of workers claim to have a permanent contract with their employer. Union members earn significantly more

So, how could the actions of trade unions hurt casual worker? Simply put, a trade union represents only its members, and not all of the work force. It will push for higher wages and larger job security and benefits for their members. This is, of course, very important. However, with higher job security and benefits, firms become reluctant to hire and opt for hiring and rehiring casual labour on a short term basis. So, the unintended consequence is a dual labour market, where a large part of the work force is stuck with no job security or benefits. Those who suffer most are the new entrants into the job market – the youth. 

A recent report by the Centre for Development of Enterprise (CDE), summarises study by Neil Rankin from WITS on the difficulties of South African youth in finding permanent employment.