Economic Notes
Economic Notes are by Labour Research Services, Cape Town
Overtime
Cutting overtime could create 100,000 new jobs
A study by the Labour Research Ser- vice reveals that 100,000 new jobs could be created by cutting overtime.
At present, the average worker in the manufacturing sector is working 4.7 hours per week overtime. The
average construction worker is doing 3.2 hours per week. Considerable overtime is being worked while about 2,000,000 workers have no work at all!
The extra 100,000 jobs could be created simply by reducing overtime to an average of 2 hours per week.
These two hours per week would pro- vide ample flexibility to cover rush jobs for emergency situations. Then
the remaining overtime hours could be consolidated to provide new jobs for 100,000 unemployed workers.
Ban overtime!
Cuts in overtime were demanded
1985 and 1987. These COSATU con- gresses passed resolutions which said
that all workers should have the right to work. But under conditions of capi- talist exploitation, this right is denied to many. Unemployment also makes
it possible for scabs and anti-union vigilantes to operate. COSATU has therefore called for a national union for unemployed workers, which is now in the process of formation.
Moreover, COSATU called for "a ban on overtime so that extra jobs can be created."
500 hours overtime, or more
More overtime is worked in South Africa than in many other
countries. Many countries place strict limits on overtime. In some countries
the limit is 120 hours per year while South African workers can work up to 500 overtime hours each year. The Transvaal motor transport industry's
"limit" is 1,250 hours per year!
Other countries discourage over- time by making employers pay a high
"premium". This means that em-
ployers have to pay an extra 50% or even 100% for overtime work. But
most workers in South Africa get only 33.3% more for overtime. Some overtime hours worked in South Afri- ca don't even get extra pay!
The economy recovers with- out more jobs
The graph shows how overtime hours have been rising since 1985.
The economic recovery has caused bosses to increase overtime for their workforce without much increase in the number of workers employed. So fewer workers are now expected to work longer hours to cope with in- creased production.
Unemployment - which figures are right?
How many people in South Afri- ca are unemployed? Several different
figures for unemployment have been
there were only 148,582 registered unemployed in February 1988 - or, 2.7% of the economically active population. Transkei, Bophuthatswa- na, Venda and Ciskei (the so-called TBVC stales) are excluded.
1985 Population Census:
This census reported that about 800,000 people of all races were un- employed, or 9% of the economically active population. But the census did not cover the TBVC states.
Current Population Survey:
Their most recent figure, for May 1988, is 963,000 African unem-
ployed, or 15.8% of the economically active population. It also excludes the TBVC states. By an expanded defini-
tion, the Current Population Survey says that 1.1 million Africans are un- employed.
Professor Charles Simkins:
His calculation included the published. But which is right? Here
are the most important ones:
Department of Manpower:
According to this department
4.9- 4.7- 4.5- 4.3- 4.1- 3.9- 3.7-
TBVC states. He estimated that there were just over 2 million unemployed in 1981. He also made provision for
under-employment - that is, for
Overtime hours worked
compared to employment
Overtime hours Employment (000)
| l i ; : | l p ! ! l l i i l i l l l Ovc riime rises ^ J
^:|:W:;:|:;:;S;:;:g : ^ H : : : S ' : S : 5 - i S : ^ : ^ : ^ S i S S S S ^ S • * " ' . „ „ „ e m p i O V m e n l
— O — Overtime hours msm Employment in manufacturi
-1.450 -1.400 -1.350 -1.300 ng
129 SALB Vol 13 No 7
people who work only a few hours each week.
Professor Jeremy Keenan:
He updated Simkin's figure. He says that unemployment could have risen to between 4.1 million and 5.3 million by 1986.
Statistics are not needed to show that unemployment is very high.
Trade unionists know this from their own experience. Drastic measures are
needed to create jobs and raise living standards. ft
Sappi Company Profile
Oappi produces half of South Afri- ca's paper and it is one of the world's
25 biggest pulp-and-paper producers - the largest on the African continent.
Sappi is essentially a forest pro- ducts company. It grows trees,
produces the pulp, makes the final product, paper and linerboard, and
then sells this to its customers around the world.
This manufacturing process takes place in Sappi's seven divisions
which were recently expanded by the purchase of Saiccor and Usutu Pulp Company.
The Ngodwana Mill, which began producing pulp and paper in 1985 cost Sappi nearly R 1,500 million to build. It was also the biggest single private sector investment in South Af- rica.
Of similar magnitude is Sappi's recent purchase of Saiccor and Usutu Pulp from the Courtaulds group, a British multinational, for R 1,000 mil- lion.
The Ngodwana Mill increased Sappi's workforce by only 800. The
SAPPI - Company structure
GENCOR
' < —
SAPPI FORESTS Transvaal
Natal Zululand
SAPPI
~i
SAPPI TIMBER
T
SAPPI FINE
PAPERS Enstra Mill Stanger Mill Adamas Mill Cape Kraft Mill
— T
SAPPI KRAFT
Ngodwana Mill
Tugela Mill Saveall Paper
SAICCOR USUTU PULP SAPPI
INTER-
NATIONAL
SAPPI can
afford a living wage
Saiccor purchase will, how- ever, bring in a further
10,000 employees. Sappi now employs over 24,000 people. Sappi's sales are expected to be over R2,000 million in 1988. This is
more than double the sales made by Anglo American- owned Mondi, its largest African competitor.
Sappi profits were big in 1987 and latest results show that they are going to be even bigger in 1988. A key question facing wor- kers and their union
PPWAWU is: can Sappi af- ford to pay a "living
wage"?
Sappi Fine Papers Sa- veall in Port Elizabeth pays R2.15 an hour. As-
suming the union's
demand is for a minimum t
wage of R5.00 the increase
would amount to R2.85. An across the board increase of R2.85 would cost Sappi an extra R6,817 per worker per year.
(i.e. R2.85 [wage increase! x 46 [hours per week] x 52 [weeks per year] = R6.817)
Director's pay
Sappi's directors were paid R38 per hour in 1987. This is an increase of R10 (34%) on their 1986 pay. This
large increase stands in stark contrast to the promise made by Derek Keys, the chairman of Gencor, that "those
Profit per worker Cost of wage demand
25-
In thousands of rands
20-
15- 10-
05-
The graph shows Sappi's profit per worker of R21,000 in 1987 compared to the cost of a wage increase of R2.85 across-the-board. It shows that
the cost of the union's demand - R6.817 - is well within the company's ability to pay.
salary and wage increases which it (Gencor) decides itself will be sub- stantially below the current rate of
inflation." ft
131 SALB Vol 13 No 7
[Inflation]
Area
Cape Town Port Elizabeth East London
Durban
Pietermaritzburg Witwatersrand Vaal Triangle Pretoria
Klerksdorp Blocmfontcin OFS Goldfields
Kimberley South Africa
C o n s u m e r P r i c e
Index (1985=100)
Sept 1988 159.3
162.0 155.8 151.6 156.5 160.8 157.2 166.1 168.7 148.7 161.8 155.6 159.6
Source: Central Statistical Services
Annual rate of inflation (% increase
over 1 year) Sept 1988
11.8%
12.3%
11.5%
11.1%
11.8%
13.0%
11.4%
12.8%
14.9%
10.0%
12.8%
10.6%
12.4%
[Inflation]
Area
Cape Town Port Elizabeth East London
Durban
Pietermaritzburg Witwatersrand Vaal Triangle Pretoria
Klerksdorp Bloemfontein OFS Goldfields Kimberley
South Africa
ConsumerPrice Index
(1985=100) Sept 1988
159.3 162.0 155.8 151.6 156.5 160.8 157.2 166.1 168.7 148.7 161.8 155.6 159.6
Source: Central Suiisiical Services
Annual rate of inflation
(% increase over 1 year) Sept 1988
11.8%
12.3%
11.5%
11.1%
11.8%
13.0%
11.4%
12.8%
14.9%
10.0%
12.8%
10.6%
12.4%
