$Unique_ID{COW03210} $Pretitle{293} $Title{South Africa Chapter 3E. Labor} $Subtitle{} $Author{Donald P. Whitaker} $Affiliation{HQ, Department of the Army} $Subject{black white development government south homelands workers percent blacks homeland} $Date{1980} $Log{Mining Quarters*0321002.scf } Country: South Africa Book: South Africa, A Country Study Author: Donald P. Whitaker Affiliation: HQ, Department of the Army Date: 1980 Chapter 3E. Labor Although economic development in South Africa has become increasingly dependent on Black labor, government legislation to prevent permanent Black settlement within areas reserved for Whites has in essence treated all Black laborers in those areas as members of a "temporary" work force. In 1980 this work force consisted of Blacks with residential rights in the Black urban townships, workers commuting from homes in nearby homeland areas, migrant workers from more distant homeland areas, and migrants from foreign countries. By law only White, Asian, and Coloured workers comprised the permanent work force of the White area, which also encompassed the group areas of the Asians and Coloureds. But the long-term continuity of Black service with White employers and the ever-growing need of the latter for a stable labor force had led the government to recognize the permanence of urban-domiciled Blacks (see Apartheid and Its Evolution, ch. 2). In the late 1970s about 43 percent of all Black male workers in the White area and one-third of those in urban areas were actually migrants under the government's definition of the term. Information on the economically active population and employment in South Africa has been obscured by the exclusion from the country's statistics of data for Transkei, Bophuthatswana, and Venda after those three Black homelands were declared to be "independent states" in 1976, 1977, and 1979, respectively. Since independence their workers have not been regarded as domestic elements of the South African economy. At the end of 1975 the country's economically active labor force was estimated at almost 9.8 million, of which Blacks constituted 71.7 percent, Whites 17.9 percent, Coloureds 8.1 percent, and Asians 2.3 percent. More than 45 percent of the Black labor force was located in White urban areas. Another 25 percent was in the White rural areas. The remainder (less than 30 percent) comprised the rural labor force of the Black homelands. Census data for 1970 showed that Whites and Asians worked predominantly in the urban centers, as did well over 80 percent of the Coloured economically active group. Employment distribution of the different racial groups by industrial division was related in part to the size and kind of work force needed and in part to its availability. Blacks constituted an absolute majority of workers in mining, manufacturing, and construction. Whites were the largest number in banking, and White and Black employees were relatively equal in numbers in some sectors such as retail and wholesale trade. Whites constituted a majority of post office workers, the result of government policies favoring White employees (see table 21, Appendix). Wide wage differentials existed between White workers and those of the other racial groups. Structurally this was explained by the occupational distribution of the work force. Whites, who held most of the skilled jobs, had average wages substantially higher than those of Asians and Coloureds, who occupied mostly intermediate skilled and semiskilled positions. The average wages of Asians and Coloureds, in turn, were in general considerably higher than those of Blacks, large numbers of whom held ordinarily low-paying, unskilled jobs (see table 22, Appendix). This structural pattern was rooted in apartheid policies that gave rise to severe discrimination in job opportunities and access to employment-more so for the Black work force than for Asians and Coloureds. The annual earnings of the Black, Asian, and Coloured workers in real terms improved between 1970 and 1979. During the nine years White real wages showed no increase, whereas those for Blacks rose at an average annual rate of 5.6 percent, for Coloureds at 1.3 percent, and for Asians at 3.6 percent. During the period Black wages increased from 20 to 29 percent of total wages, those for Coloureds from 7.3 to 7.9 percent, and for Asians from 2.5 to 3.1 percent. White wages meanwhile, declined from 70 to 60 percent of total annual wages paid to workers in the nonagricultural sectors. The discrepancy in actual wages, however, remained great. As of early 1980 in mining, Black wages were only about 16 percent of White wages, in manufacturing about 23 percent, and in construction under 20 percent. In 1970 a gap of R 2,769 existed between the average White wage of R 3,247 and average Black wage of R 478. In 1979 the gap had increased to R 6,006-the White average wage being R 7,895, and that for Blacks R 1,889. The proportionally low occupational status of the Black labor force related directly to Nationalist government policies enunciated in the early 1950s. These were based on the contention that Black workers had no place in the White area beyond certain work levels. As a result only limited Black training facilities were made available because, according to government policy, the place for Black vocational education was in the homelands. As the economy expanded and the supply of skilled White workers dried up during the 1970s, the business community put increasing pressure on the government to change its policies. In 1977 the Commission of Inquiry into Labor Legislation, popularly known as the Wiehahn Commission, was appointed to investigate and make recommendations with respect to existing labor laws in the commercial and manufacturing sectors. (The mining sector was subsequently added.) In 1979, upon the commission's recommendation, the long-standing statutory reservation of certain jobs for Whites was abolished, and by the end of 1980 only two reservations remained in force, both of which were to be phased out. In June 1980 the government accepted a further recommendation that Black apprentices be trained in the White urban areas to qualify as certified skilled artisans. The early response was quite small, and the government then announced special tax incentives for employers who trained Black apprentices. But major obstacles to rapid entry of Blacks into the artisan class still remained in 1980. One hindrance was the continuing negative attitude of White artisan labor unions toward the training of Blacks. But most important were the inadequate education received in the basically inferior Black primary school system and the economic circumstances that prevented Blacks from attaining the eight years of education required for selection for apprenticeship (see Education, ch. 2). Since its earliest history labor unionism in South Africa has borne a racial imprint. The first craft unions set up in the 1880s by immigrants from Britain consisted of skilled White workers whose self-interests gradually became identified with preventing the use of Blacks, Coloureds, and Asians in any but unskilled jobs. Racial attitudes were reflected in the first Industrial Conciliation Act of 1924, the new Industrial Conciliation Act of 1956, and were an important aspect of the Industrial Conciliation Amendment Act of 1979. The first two acts excluded Blacks from direct participation in legal unions whose members were limited to Whites and Coloureds (the latter defined as persons neither White nor Black). At the same time, agreements reached through collective bargaining could be applied by government order to all employees in an industry, thus subjecting Black workers to their provisions without representation and to the penal sanctions that were included. The 1924 act did not specify racial segregation of unions, but this provision was included in the 1956 measure, although the government was never able to effect complete separation of various mixed unions that had arisen before 1956. Black unions could not legally register, but there was no provision in law to prevent their formation. After enactment of the Suppression of Communism Act of 1950, however, Black unionization was impeded by government action against union leaders under the very broad terms of the act (see Rise of the National Party and Development of Apartheid, ch. 1). A series of strikes in Durban in 1973 involving Blacks led to a strong revival of the union movement. Despite continued government arrest, detention, and banning of various union leaders, there were over thirty active Black unions by 1979. One of the charges given the Wiehahn Commission was to recommend changes in industrial laws that would bring about sound labor relations. The 1979 Conciliation Amendment Act reflected two major recommendations. The first was a redefinition of the term "employee" to include all workers irrespective of race (excepting foreign migrant workers); the second provided for the registration of Black unions. A number of Black unions had registered by the end of 1980, of which some were so-called parallel unions that had been assisted in organizing by White unions. The Wiehahn Commission had also recommended full freedom of association, that is the formation of integrated as well as segregated unions. In line therewith the Federal Consultative Council of the SAR&H Staff Association, whose affiliated all-white unions had about 90,000 workers, amended its constitution in order to take in unions of the other races. The association's application to register as an integrated union had not been acted on by the government, however, through 1980. The Homelands At the end of 1980, despite some twenty years of development efforts, the Black homelands remained economically nonviable dependencies of the industrialized White area. Increasingly during the 1970s South African and foreign economists had questioned the feasibility of developing the homelands into viable economic units-a major aspect of the National Party's race-related scheme for separate development that was promoted after the party's assumption of power in 1948. In mid-1980 a report of the semiofficial Bureau for Economic Research, Cooperation, and Development (BENSO), noting the failure to attain almost all objectives in homeland development, declared that the solution to South Africa's problem of race relations did not lie in the creation of a number of separate economies. Government recognition of the BENSO conclusion was subsequently contained in a proposed new plan whereby a number of economic regions would be delineated. Homeland borders would continue as political and ethnic boundaries, but economic development throughout the economic regions would be coordinated and administered by a joint authority from the participating entities (that is, the White area and the homeland). The revenues resulting from development activities would be shared. As of the end of 1980 the government had not revealed details on how it proposed to administer the new approach. Early steps in the implementation of separate development included an initial major study of economic conditions in the homelands (then Native Reserves) and preparation of a rationale for such development by a government commission established in 1949. A summary of the commission's findings (popularly known as the Tomlinson Report) published in 1955 noted the marked inability of homeland subsistence agriculture to support the population and the large part played in the economy by earnings of "temporary" Black workers in the White area. The report concluded that separate development could succeed only if a large part of the homeland labor force found employment in industry. It recommended rapid industrialization of the homelands led by government and White investment and White entrepreneurship. A subsequent government white paper in 1956 rejected the proposal-as being contrary to the basic concepts of apartheid-and set the pattern for homeland economic development that persisted until the end of the 1960s: such development should be left to Black initiative alone, with some financial and technical assistance from the government. [See Mining Quarters: Barracks-like all-male living quarters for Black miners at a gold mine near Johannesburg. Most miners must reside apart from their families, who live in the Black homelands. Courtesy United Nations/Pendl.] It was accepted, however, that industrial employment for a large part of the male work force of the homelands was necessary to sustain the homeland populations and that development in the homelands would not soon meet that need. At the same time the continued industrial expansion of the White area was bound to attract additional Black labor. The movement of more Blacks to the four major centers of industrial concentration in the White area-the Pretoria-Witwatersrand-Vereeniging complex and areas centered on Cape Town, Durban, and Port Elizabeth-was undesirable in the National Party view. In 1960 the government proposed a solution to the entire problem through the Border Industries Scheme. Special incentives including government subsidies and other assistance were offered industries to establish plants in selected growth points located within about fifty kilometers of homeland borders. The scheme has usually been described by South African government sources as a plan to decentralize industry, but an apologia for apartheid has stated that the chief purpose of the program was to prevent an "unhealthy" concentration of Black workers in the older White urban areas. Although border industrial development has provided a substantial amount of employment, it was generally agreed in the late 1970s-statistics varied considerably-that the areas were absorbing only part of the annual increase in the homelands work force. Moreover border industry appears to have acted negatively on homeland development by attracting as workers better qualified individuals who might otherwise contribute measurably to homeland internal development. At the same time, the better stocked White shops in the border areas absorbed most of the earnings of Black workers, thereby further hindering homeland internal development. The possibility for border industries to contribute more positively to Black development might be subsumed in Pretoria's 1980 proposal for regional economic development-assuming that both the border areas and the homelands will constitute a part of the envisioned regional economic unit. The government's own programs for homelands development included three so-called five-year plans between 1961 and 1976. They basically outlined what the government proposed to spend on the homelands during each plan period. The first period emphasized the agricultural and pastoral sectors, and the second concentrated on education with some expenditure for economic projects. The third plan was concerned principally with the Black population in the White area, although some grants and services were also provided to the homelands. Notably, during the entire 1961-76 period no individual development plan was drawn up for any homeland. After 1976 funds were provided on an annual basis through grants and development loans. Extremely limited capital and a pronounced lack of entrepreneurial expertise have been major factors inhibiting Blacks from assuming a primary role in the economic development of the homelands. The growing implications of this trend finally forced a government policy reversal in 1968, when White entrepreneurs were authorized to establish industries at designated growth points in the homelands. The White businessmen operated nominally as agents of the Bantu Investment Corporation that had been formed in 1959 to provide financing for homeland companies. White entrepreneurs, however, could obtain land only on a lease basis, and after an established period, at least in theory, the enterprise had to be sold to Black interests. In 1973 the agricultural sector was also opened on an agency basis to White commercial production of industrial crops such as cotton, sisal, and sugar. A new condition was introduced: Blacks would be given training, and those qualified would be advanced to the highest possible supervisory and managerial posts. In 1977 the Bantu Investment Corporation was renamed the Corporation for Economic Development (CED), and revised legislation has permitted Whites, Asians, and Coloureds to acquire minority holdings in Black homeland companies. Legislation by the self-governing homelands has also permitted partnerships between Blacks and Whites. As of 1980 practically all larger scale enterprises established in the homelands had been jointly funded by CED or the homelands' own investment corporation and South African businesses. Private Black holdings in these enterprises appeared to be small, as indicated by figures showing that of forty-seven joint enterprises established during 1976-78 only five had initial Black shareholdings. * * * A profuse literature exists on the South African economy. The great majority deals with the effects and implications of the government's policy of separate development on various aspects of the economy, ranging from the shortage of skilled labor to apartheid's inhibiting effect on the investment of foreign risk capital and the potential results of international sanctions imposed to force a change. Among substantially impartial studies are a number prepared for the Investor Responsibility Research Center, Washington, D.C., including those by David Hauck, David M. Liff, Kenneth Propp, and Desaix Myers, III, which have been issued also in a single volume, U.S. Business in South Africa. In the same category is Oil Sanctions Against South Africa by Martin Bailey and Bernard Rivers, a major survey of the South African oil industry. Robert I. Rotberg's Suffer the Future describes in an easily readable style the strengths and weaknesses of South Africa and its problems. Generally highly regarded is The South African Economy, a study by D. Hobart Houghton, a South African. An informed, objective examination of a homeland granted independence is offered in Transkei's Half Loaf by Newell M. Stultz. Especially valuable is the annual Survey of Race Relations in South Africa, which offers a wealth of detail on the Black, Asian, and Coloured populations. South African government publications, of particular use for data on the economy, include the annual Abstract of Agricultural Statistics issued by the Division of Agricultural Marketing Research, the Bulletin of Statistics published quarterly by the Department of Statistics, and the Quarterly Bulletin of the South African Reserve Bank. The Department of Mines' Mineral Resources of the Republic of South Africa (fifth edition) provides extensive detail for those interested in mining. Also highly useful are South Africa 1979: Official Yearbook of the Republic of South Africa and the privately published Agriculture in South Africa (1978). (For further information see Bibliography.)