Of workers and employers

13 Dec, 2019 - 00:12 0 Views

eBusiness Weekly

Clifford Shambare

Since the beginning of capitalism there has always been antagonism between the worker and the employer. This antagonism has been the basis of labour unions. So naturally, given this state of affairs, the two parties’ interests, even today, hardly converge. If they do at all, as happened in this country starting from around 1997, one must smell a rat!

Karl Marx dwelt on this issue through three large volumes of ‘Capital’. With time he had disciples in the form of Hubert Engels and Vladimir Lenin, followed by less well known individuals such as Elizabeth Rosenbourg. All these individuals have contributed immensely to the development of communism and socialism, its milder variant.

And although quite a few economic systems have, and still are, being proposed from a number of quarters, these two have so far, been the chief opponents of capitalism.

The result of the said antagonism has been workers’ unions which were first organized in Europe specifically, France and Britain, later spreading to other parts of the world. It is also important to note here that a lot of the labour relations theories and knowledge have been based on Marx’s work.

Looking closely at the phenomenon, we find that over the years, Russia and China became the centres of communism and socialism. These are economic systems where the rights of the worker have received much attention.

That said, this system seems to have been destroyed through troika in the Union of Soviet Socialist Republics (USSR) in the early 1980s. In Central and Eastern Europe troika was largely responsible for the breaking away from Russia, of all the small European states of Estonia, Georgia, Ukraine and others.

Be that as it may, in China communism is still in vogue even though the West somehow hoped it would be destroyed with the adoption of state capitalism in that country, starting from around the turn of the 21st century.

In Africa, South Africa is one country where labour unions have flourished, starting with the arrival of the British settlers there. The Confederation of South African Trade Unions (COSATU) has been the umbrella body of almost all the labour unions in that country.

And ironically, even though Africa has lagged behind other continents on many fronts, it has been one of the leaders in the development of labour unions. From the mining heydays of the early 1900s to this day, there have been quite a few running battles between the employers and the labour unions in that country. The most famous – or shall we say notorious – of these have been Sharpeville (23, March 1961) and Marikana (16, August 2012). Both of these labour strikes became well known for their blatant police brutality in which 69 black workers died and 180 were injured during the former while 44 died and 78 were injured during the latter.

Furthermore, there was a palpable racist element to the killings and ironically, at Sharpeville the majority of the policemen were white while at Marikana some 44 years later, the majority of them were black.

This situation illustrates the enduring power of both racism at the work place and the tenuous relationship between the worker and the employer!

And interestingly, on the other hand, America, the bulwark of human rights, is one country where the relationship between the employer – also known as the capitalist, and the worker – has manifested itself in a rather fascinating and sometimes, poignant way.

In that country, the capitalists who interestingly, include or are backed by the Republican Party – have today, tried their best to disguise this antagonism through their media. And these two – that is, the capitalists and the media, have become the most powerful entities in economic matters in the world today.

In this respect, consider ‘Occupy Wall Street’ and the running battles between Wallmart – a sales and distribution giant, the world over today – and its workers, over poor pay levels that some claim to be below the poverty datum line as well as racism and sex discrimination, among other issues.

Zeroing in on Zimbabwe, one finds that today, this relationship between these two parties has spawned a interesting ‘love’ triangle with the employer  at one angle of that triangle, the worker on the other and the opposition politicians on the third angle.

This is a relationship in which there are a number of contradictions. The base and basis of these contradictions is the more heightened and continual tussle between the Government and its employees on one hand and the apparent harmony between the private sector worker and his employer on the other.

In this country today, because of the continual vexatious tussle between Government and the opposition politicians, the latter are projecting the perception that the former is the only employer in the country.

That said today in this same country, with its rather amorphous economic structures, it is quite difficult for one to come up with clear information where employment rates are concerned.

Be that as it may, the general impression coming from the country’s economic analysts is that the unemployment rate therein is currently untenably high and even rising.

However, this perception appears not to take into account, the challenges that stem from the concept and consequent definition of the terms ‘employee’ and ‘employment’. This state of affairs is most probably the reason why the actual statistics on the ground appear to reveal a different picture from that perception.

According to those statistics, unemployment rates in Zimbabwe from 1982 to 2018, have not been much different from many countries. In fact, they are said to be  actually lower than those of South Africa, Turkey, Spain, Brazil and Argentina, among others in the same period (Trading Economics).

If we take this information to be factual, what it effectively means is that this country has a substantial number of workers who should be paid a wage. In this respect, the fact that these wages could be below the poverty datum line becomes another matter altogether.

So considered from the perspective of fair worker treatment, these wages should be tied to the profitability, or otherwise, of the organizations they work for – that is, from domestic working conditions to SMEs of various shades, right up to what can be regarded as ‘decent’ companies.

Under normal accounting principles and practice, salaries and wages constitute a portion of a company’s costs of production. This still remains so even though the proportion of such costs to the total costs of the company vary with the structure and nature of the business of the industry concerned.

In the current period, there are sixty companies registered on the Zimbabwe Stock Exchange. Even though I do not have concrete figures, I want to assume that each of these companies has a decent number of workers employed by it.

Now this is where the matter becomes interesting. A sizeable proportion of the major companies here reported profits for the most recent financial year despite a fall in volumes. During the same period these companies changed from reporting their returns in US dollars to Zimbabwe dollars. They also changed their cost and return profiles from the former to the latter.

As can be expected, some distortions cropped up in their accounts, originating from raw materials and finished goods in transit and other interim accounting and inflation changes, and so forth. And indeed, a number of them sounded their disgruntlement and/or discomfort with this state of affairs.

In the meantime, the exchange rate has been trying to find its stabilization point from the initial par of US$1:2.5, to US$1:8 to US$1:9 then it continued its inexorable rise to US$1: 15.5 where it stayed for a while then it started creeping up again to US$1: 16.5 where it is now creeping to something above this figure. All this time prices have been rising apparently, in unison with the exchange rate. And they are still doing so, for instance last week (27-30 November,2019). This means that in absolute terms, our production costs have also been rising at the same rate.

For quite a while now, the Zimbabwe dollar has been more or less at par with the rand. Interestingly, for  a long time now, the South Africans have mentally adjusted to this situation, but we on our part, believe our money is now trash!  The other day I was talking to a white man of about fifty years of age, about this issue when I asked him to explain our attitude to our money as compared to a situation where the South Africans are content with their currency which is now roughly at par with ours.

He blurted out his explanation on his way out of the shop in which we were, saying “That currency has been in existence for a long time”. This situation speaks to a state of one’s confidence in  their currency; and this is a state which we as Zimbabweans, are still contending with.

The perplexing thing regarding this matter however, is the situation regarding wages. (Notice here that I have deliberately separated wages from salaries. The reason is the wide gap that has always existed between executive salaries and wages in this country.)

So far, we have not heard that wages are running in unison with the exchange rate. This is crucial to cushion the worker who makes up a good proportion of the Zimbabwean working public which according to the said statistics, makes up a good proportion of the country’s working population.

Now the question to ask here is this; how should a budget or cost accountant treat the wages which are in themselves, a cost item—when compiling his/her costs? If the answer is that he/she should not discriminate this item from the other costs, it follows that wages should also rise by the same amount as the other costs! From an accounting perspective, therefore, there is no other sensible way to do the sums here.

This is still the case even though the situation implies continual wage adjustments. So, if the employer is continually adjusting prices upwards, whether voluntarily or through compulsion from forces external to his orgainsation—why should he/she then be reluctant to also adjust workers’ wages accordingly?

From this analysis it becomes clear that the worker is being shortchanged by the employer. So if we are agreed that wages should, like the other costs, also have so far risen by 560 percent, it follows that a good part of the public should be able to afford our products thereby reducing the economic trauma that they are now experiencing.

At this juncture I can already hear some grumblings from the employers whose major fear will be a wage rise induced inflation. Then of course, there is the issue of the government being unable to foot such a huge wage bill.  So clearly, we now have that stubborn chicken and egg conundrum here.

That said, I must admit that I alone, am not able to prescribe answers to this interesting case. However, I am sure it will arouse a lot of interest among those who will read this article. But like I have always maintained, there must be a way to solve such challenges.

In this case, imagine a scenario where wages went up and people were more able to afford the basics. Would the economy remain as stagnant as it is today? I know for a fact that some degree of inflation is always required to stimulate economic growth; but to what level in our circumstances, is the question?

Be that as it may, here I believe the elephant in the room is our low levels of production. In this case I also want to believe that our main challenge is to crank up our production system, one way or the other, into an active enough state to get the economy growing again! But how, still remains the question?

Ultimately, whatever the solution will be to these challenges, there is no doubt in my mind, that it will require considerable levels of fortitude from all of us to get over them.

As for the relationship between the worker and the employer, I believe that for this country to eventually prosper in a sustainable manner, we need to move closer to the Nordic economic model over time. How long it will take us to get to the ideal situation will largely depend on our willpower as a whole people, in doing so.

But whether we like it or not, some changes are already taking place to the current Western model of hardcore capitalism that we also use. In this case, consider the current work of such prominent capitalists as Joseph Stieglitz and Klaus Schwab.


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