There is one lesson that university academics have systematically failed to teach economics students: it is an error to evaluate a policy, such as the youth employment subsidy, on its effects on a special group, such as unemployed youth or trade union members. We should trace the effects of a proposed policy not only to some special interest in the short run, but to the general interest in the long run.
The study of economics should make us suspicious of the special pleading of selfish interests, for they are almost never aligned with the common good. If we apply this mode of analysis to the most powerful special interest in SA, the Congress of South African Trade Unions (Cosatu), some useful insights arise.
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Why does Cosatu oppose e-tolling?
It has nothing to do with the will of the people or workers’ transport costs. It is a simple membership calculation. Unionisation of a state-owned road operator is likely to be 75,6% - the current level of unionisation in general government - whereas unionisation of private sub-contractors, by the same method, is likely to be 11,8%. For every 1000 workers, Cosatu gains 638 more members if toll roads are national entities, representing annual membership fees of around R43,5m for the estimated 80 000 workers involved in the project over time - an addition of roughly 7% to Cosatu’s current membership income, from just one project.
The same rationale applies to Cosatu’s support for the developmental state and the de facto nationalisation of mining rights, for the state (75,6%) and mining (80,7%) have the highest unionisation rates in the country. For anyone who has residual doubts about the importance of union membership to trade unions, consider that Cosatu’s Secretariat Report to the 5th Central Committee (2011) devoted nearly one-third of the entire document exceeding 100 pages, directly or indirectly, to the subject of membership and/or dues.
Article continues on page two, three, four and five and answers the following questions:
- Why, in direct contradiction of the point above, is Cosatu indifferent towards the Expanded Public Works Programme?
- Why does Cosatu promote the myth of the "working poor"?
- Why does Cosatu oppose labour brokers?
- Why does Cosatu oppose the youth wage subsidy?
- Why does Cosatu oppose performance-based pay?
- Why does Cosatu support the minimum wage and social grants?
- Why does Cosatu oppose private capital investment?
- Why, in direct contradiction of the point above, does Cosatu vocally support the capital-intensive manufacturing industry?
- Why does Cosatu in effect oppose greater employment?