A mineworker’s wage: The only argument against the R12 500 is greed

by Sep 13, 2012Magazine

argumentMarikana has left the nation in shock. Everyone hopes that the judicial commission of enquiry set up by President Zuma will shed light on what led to the police killing of 34 workers on the 16 August 2012. Lest we forget, eight workers and two policemen were killed the week before.

The workers at Marikana are still on strike a week after the massacre and their core demand is a wage increase to R12 500 per month. While attempts at allocating blame, positioning to capture a political base or preventing a loss of institutional and management legitimacy have almost drowned the voice of workers, their steadfastness has ensured that the core issue remains alive. In fact, they are teaching South Africa a lesson and are prepared to sacrifice for it.

Cheap labour must end

The lesson is that South Africa cannot continue to develop on the back of low wages, or, as we used to say, on cheap African labour. Marikana reveals in no uncertain terms that difficult choices and hard sacrifices are necessary to change this reality, which remains entrenched even if it is not spoken about. These brave workers are saying what nobody dares to say anymore – our democracy rests on a system of cheap African labour, whose time must also pass.

But is the demand of workers for R12 500 per month unreasonable?

If it is, what can be said of the remuneration of CEOs in the sector? In the LRS Directors’ Fees Survey, the average remuneration of mining CEOs during 2011 was R20.2 million per annum, or R55 000 a day.

To be sure, R12 500 a month is much higher than current pay levels, which vary from one commodity to another. The minimum wage for gold miners is R4 222 whereas coal mines pay a minimum of R4 852. Platinum miners earn at least R5 396 and those in diamond mines can expect a minimum of R6 540. These low minimum wages across the board maintain mine workers in perpetual poverty.

However, it is argued that R12 500 is unaffordable and will lead to the collapse of companies and result in joblessness.

But the average profits made by the nine mining companies in the LRS company database, after all costs of operations were paid for, amount to almost R39 billion. There are about 520 000 people formally employed in mining (Stats SA, QES report), so the profits of just these nine companies could have employed more than 2.3 million people at R12 500 a month.

National minimum wage

A wage of R12 500 is way above the current average minimum wage and that of other sectors. The median minimum wage finally reached R4 000 a month in 2012, with variations between sectors. The median in mining, as shown in the table below, is R4 743 a month, which is already higher than other sectors. The unions constantly call for centralised bargaining and a national minimum wage. Perhaps ears will now be more receptive to union calls for equity and fairness in the workplace.

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