Labour broking and social transformation | by Niall Reddy

by Apr 2, 2012All Articles

labour-brokerCOSATU’s recent decision to call a general strike that saw hundreds of thousands leaving the shop floor drew attention to an issue that has proceeded with relatively scant media attention given its importance in understanding contemporary South Africa.

The data is murky but experts estimate that over 1 million and possibly as much as 2 million workers are employed by labour brokers.

Those figures offer an explanation to those who were surprised to see the union leadership dispensing with the usual Alliance protocol and taking their differences with government to the street.
Broking has become capital’s most successful innovation in the war to preserve what Apartheid did so effectively – cheapening the cost of labour to levels that allow generalized superexploitation.

Whilst it has emerged in other parts of the world – India’s trade unions raised similar grievances in a recent general strike – the South African case has been especially prodigious (giving the lie to claims by business unions that their practices are entirely consonant with global trends towards labour ‘flexibility’). It is effectively outlawed in Latin America and heavily regulated in most rich countries.

It’s not immediately obvious why broking would provide such an appealing prospect for the whole gamut of South Africa businesses – the industry rakes in billions in profits meaning that broking firms take a huge chunk on top of wage costs. The reason that is has expanded so profusely, encompassing as much as 2/3rds of new jobs since the end of Apartheid, is simply that brokers have succeeded in lowering wage packages to such an extent that it is still cheaper for businesses to pay a large fee to third parties than to hire directly.

How do they manage this? Essentially by converting permanent jobs into casualized precarious labour, shorn from pensions and benefits and with tenuous means of engaging in collective bargaining and industrial action.

In the main, brokers use ambiguities in the law to hire workers on what amounts to task based temporary contracts – the duration and conditions of which are stipulated by the actual employer (ie the client company). Workers that prove troublesome are summarily informed that their contract has come to an end – foreclosing on any legal challenges to unfair dismissal and maltreatment.

Mediating the employer-employee relationship with an outside company provides numerous other advantages to bosses. Workers that manage to defy victimization and organise collectively will find it incredibly difficult to bargain effectively when there may be innumerable legal employers at any given workplace. 

The broking industry has bloated to an estimated worth of R26 billion, a fact which CAPES, the central organ of the broking lobby, uses to arrogate to themselves an irreplaceable role in the provision of jobs. But perhaps ‘industry’ is a misnomer since, as COSATU and many others have pointed out, creating new jobs and engaging in productive, value adding activities is exactly what broking companies don’t do. Their obscene profits can only be accounted for as a transfer from what would have been workers’ wages.

In practice broking has meant rapidly declining work and living standards for millions of South African’s and their relatives and the burgeoning of what sociologists call the country’s ‘decent work deficit’. In has deepened the incredible alienation of large layers of society who have been reduced to dispensable factors of production, with little or no determination over their lives or the conditions of their labour.

At the most exploitative, most unregulated end of the spectrum, inhabiting the very wide interstices of the labour law, is the notorious ‘bakkie brigade’. It is here that COSATU’s analogy of broking to a ‘modern form of slavery’ rings truest. Employers, typically in rural areas, order a quantity of ‘bodies’ for a set duration and ‘agents’ will trawl the most desolate corners of society for those desperate enough to toil for starvation wages. And in a country with near 40 per cent unemployment, there are many so willing.

Even if, for arguments sake, we restrict the terms of the debate to the narrowest economic metric the case for broking doesn’t stand to scrutiny. Certainly, lowering wages and stripping regulations may create some jobs in the short run after a painful adjustment process. But that would only exacerbate the structural distortions in the South African economy that are the real sufficient cause of unemployment.

Contrary to the mantra of the business media the wages are not too high. In fact the wage share of GDP has been declining steadily over the last decades to historic lows concomitant with the rise of superprofits. In a setting of already extreme inequality this has meant feeble domestic demand and hence little incentive to reinvest in productive labour intensive industries. Instead these profits have by and large gone to buttressing Minerals-Energy-Complex accumulation and a parasitic financial sector or illegally expatriated.

Since democracy, South African elites have shown incontestably that the only economic program they are capable of envisaging is of the worst kind of comprador neoliberalism that has wrought tremendous suffering in the name of ‘macroeconomic stability’, official ‘developmental state’ rhetoric notwithstanding. Articulating and affecting an alternative development policy that can grow the economy in a people-centred way requires an assertion of working class power on the state.

And that in turn entails providing a credible challenge to labour broking. Trapped in old modes of organizing under an ossified bureaucracy suffering from an acute case of Alliance tunnel vision – COSATU has been sluggish to wake to the threat and largely unsuccessful in unionizing the millions of brokered workers. Labour flexibility has been a centrepiece of the ANC’s market friendly economic policy and they are likely to relinquish it only under the most determined opposition, which the incumbent COSATU leadership, beyond the initial strike action, is extremely unlikely to provide. 

Indeed the most recent slate of labour reforms seems to confirm the intention to compromise – alongside meagre measures to regulate broking the government is pushing through a raft of amendments that will make obtaining the right to strike more difficult and levy the costs of damage to property on the unions.

Even in utterly implausible scenario that the state does ban broking outright that would not be provide a panacea the problems facing workers. CAPES and its allies would hold the process up in the courts for years and may even succeed in winning a constitutional injunction based on the right to enterprise, as happened in Namibia. Failing that, brokers will simply reinvent themselves as service contractors or decamp to the black market.

The law will only aid workers so much. Real solutions lie, as always, in unity and in strengthening bottom-up, worker-controlled organizations. 

There is no question that broking has constituted the central vehicle for the particular South African form of the neoliberal attack on the standard employment relation and hypercommidification of labour. Its role in redefining the labour-capital relation and the experience of work for millions of South Africans has profound implications for social transformation.

Many have heralded, with the demise of Fordist secure work, the rise of a class-in-becoming – the precariat – comprised of temporary labourers as well, in some definitions, as sections of the exploding urban underemployed – most memorably depicted in Mike Davis’ Planet of the Slums.

The conclusion most often drawn from this analysis is to eschew the ‘Old Left’ focus on the traditional working class as outmoded, and to look for historical agency in what was known as the lumpenproletariat – with wholly new forms of organization.

But this seems undue. The ‘surplus population’ that capitalism always creates cannot ultimately substitute for the strategic position of the organized working class at the point of production or the social position that facilitates its interpellation as a class-for-itself.

Work has always been precarious under capitalism. If it is even more so now, that is due to the 40 year advance of neoliberalism. A new tide of resistance emanating from the global crisis provides auspicious circumstances to halt and reverse that advance. 

None of this is to justify reflexive cleaving to strategies that don’t reflect changing conditions or to shirk the necessity of linking the struggles of poor communities against privatization, failed delivery and state repression with the struggles of organized workers for better conditions and a fair share – struggles which are inherently interconnected in any case.

The fight for a basic income graft, for example, has direct bearing the fight against brokers – by giving workers an alternative it could restrict the supply to the bakkie brigade and strengthen the resolve of workers to demand decent conditions.

Central to this will be finding and testing new ways of organizing amongst the precarious and to consistently contest the efforts of business to divide workers and unemployed. These challenges at the same time present an opportunity to reinvigorate the unions with bottom-up mass activity and to draw workers into broader struggles for social change.

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