Creative responses needed to problems of unemployment, cheap imports

[notice] Catholic Parliamentary Liaison Organisation researcher, Mayibuye Magwaza, raises some ethical and practical considerations that arise as businesses and unions grapple with the challenges posed by unemployment and the influx of cheap goods from China.[/notice]

A recent report in Business Day indicates that a clothing company, Peter Blond and Associates, has decided to hire 100 new workers. This follows a deal signed between SACTWU (the South African Clothing and Textile Workers Union) and clothing manufacturers that allows textile companies to hire new workers at a wage 30 per cent lower than that of existing workers.

One of the most acrimonious battles between unions and employers has been over wages. On the one hand, unions insist on the need for decent work at decent pay. On the other hand, there has been a very real sense that the country’s manufacturing industry cannot compete with cheaper Chinese and other imports. The textile industry epitomizes this dilemma. In Newcastle, KwaZulu-Natal, factory owners have been paying their workers below the minimum wage, insisting that they cannot remain competitive if they do otherwise. The union response is that minimum wages are legally enforceable, and factory owners have no right to break the law.

There are valid arguments on both sides of this debate. Unions rightfully safeguard their hard-won rights, and conditions in some factories are inexcusable, whatever the wages. Church teaching is very clear and consistent on the duty of unions to uphold workers’ rights. Pope John Paul II taught that “in order to achieve social justice…there is a need for ever new movements of solidarity of the workers and with the workers. This solidarity must be present whenever it is called for by the social degrading of the subject of work, by exploitation of the workers and by the growing areas of poverty and even hunger.”

However, with massive unemployment and growing poverty in this country, the urgent need to create jobs cannot be sacrificed to the interests of those who happen to be employed and earning a decent wage. Furthermore, cheap products from China mean that local businesses simply must be more competitive if they wish to survive. Ideally, we should increase productivity through better education, training and diversification of the economy, but even if the education system were to turn around tomorrow, there would still be masses of unskilled and unemployed people desperate for work.

Agreements such as that mentioned above are one practical response. New and creative responses that safeguard dignity and offer hope and jobs for the unemployed and desperate, while still allowing workers to maintain their positions and pay grades, should be encouraged. It is imperative to find ways of maintaining dignity and creating sustainable jobs while holding the ideal of a ‘just wage’ ever in mind and striving towards its implementation.

It is critical that both sides stick to the deal. Clothing manufacturers should hire where and when they can, and take care not to use this as an excuse to retrench existing workers or to slash benefits. Unions should also not break the deal by suddenly insisting that the new workers be brought up to wage parity. Commitment is critical if deals like this are to remain viable.

Similar solutions should be pursued in other sectors of the economy; our country needs compromises that have room for the legitimate interests of both workers and businesses. The urgency of job creation must be a constant, underlying theme that should drive everyone to action.

It may be worth pondering the quandary commented on by Pope Paul VI: “It is unfortunate that ….a system has been constructed which considers profit as the key motive for economic progress, competition as the supreme law of economics and private ownership of the means of production as an absolute right that has no limits and carries no corresponding social obligation.”

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