A truly gifted jazz musician that I have the pleasure of knowing wrote a heartfelt commentary on the current situation facing South Africa. I felt it needed to be spread around so I am posting it in its entirety here.
“Is there anyone who does not think sharing is a good thing? We learn from a young age that we must share. All the great religions of the world espouse the benefits of sharing. But sharing is not just morally beneficial. It is the answer… to all the problems we are facing right now in South Africa.
Our Nation stands at a crossroads. Our people are very frustrated, angry and confused. South Africans put their faith in the “New South Africa”, the “Rainbow Nation” and non-racialism, but after 14 years the vast majority of us remain desperate and struggling. Many people are understandably beginning to question if they need to resort to violent revolution in order to secure a better life.
Because of our racist history, and because our economy is very much still skewed along racial lines, many of our people are being seduced into believing that nationalist, racist and xenophobic ideologies are the solution. It is time, before it is too late, for those of us who still believe in the dream of a prosperous, non-racial and democratic, free society to prove that the “Rainbow Nation” can work, and that non-racialism and goodwill is still the most effective solution to the problems faced by the majority of our people. Unfortunately, as the past 15 years have shown us, it is not enough to simply mouth-off about the wonderful African “Ubuntu”, and non- racialism, when the truth of the matter is that there has been very little of it in practice from those with power and wealth.
South Africa is the most unequal Nation in the world. It is common knowledge that though the players might have changed since 1994, the unethical and immoral rules of the game never really changed, and because of this, inequality has in fact increased. In fact, our new leaders have been using race as an excuse to continue the status quo, as if our poverty is somehow acceptable now that the new elite are from “previously disadvantaged” groups. The root of the inequality in SA is simply the increasing disparity between the wages of our business leaders and their lowest paid workers. Because of our racist history, this has skewed our inequality along racial lines, but no amount of race-focused empowerment will address this inequality, unless we address the wage disparity between bosses and workers. Obviously, to encourage and reward entrepreneurialism and risk, bosses deserve to earn more than their workers. However, our bosses now average around 300 times more than their lowest paid workers, with some earning around 2000 times more. Clearly this is immoral and destructive to our community and has to change simply because it is unsustainable. Some argue that the disparity in wages is a consequence of market forces, and the supply and demand of labor. But, in truth, it has more to do with the fact that bosses decide their own salaries, while workers don’t. There is no better example of this than the disparity between the salary of a teacher, nurse or policeman, compared to the salary of our members of parliament.
There is a shortage of teachers etc, but always a surplus of politicians. Politicians may argue that their job is more important than a teacher’s, but I doubt anybody else would agree with them. There is also no doubt as to who makes more sacrifices and works harder. Furthermore, market price is not just affected by the supply of a commodity (in this case labor). It is also affected by the demand for money. A poor and desperate person will sell a valuable product for less than a rich person would, because he/she needs the money more urgently than a rich person who can shop around for a better price or wait for a better offer. Employers take advantage of this bargaining power and consequently the wage gap keeps getting greater. Preying on the weak is not just morally wrong… There are many long-term, negative social consequences to treating people as a commodity to be exploited.
Much has been said about how the Japanese nation has handled their recent crises in such a unified and orderly manner. A few analysts have already pointed out that the cause of their unity can be traced to the fact that it is one of the most equal societies in the world. It has been pointed out that Japanese bosses would be too ashamed to accept exorbitant salaries because of a sense or duty and honor, solidarity, empathy and modesty. It would be wonderful if South African business leaders demonstrated the same character and leadership.
Surely it is time, for the sake of a non-racial, prosperous and unified nation, that our religious, political, business and labour leaders get together, and decide on an ethical maximum wage ratio between our bosses and their workers. Legislation such as tax incentives for compliance and penalties for non-compliance can be used to as incentive for investors and businesses to implement this wage compression. Once an appropriate wage ratio is decided on, it could be enforced gradually so that the adjustment to our “leader’s” incomes is not traumatic.
We could start with a moratorium on wage increases for executives until their companies wage ratio reaches the required level through inflationary increases of their workers wages. By spreading wealth into the communities that need it most, Wage Compression will benefit our economy hugely, because our people will have money to support local businesses, and invest in child-care, education, healthcare, business and the employment of others.
We will always lack jobs if there are too few employers. By distributing the money into the communities we will create more employers. With Wage Compression there would be no need for a minimum wage and striking would be a thing of the past. If the boss wasn’t earning more than the workers, there would be nothing ethically wrong with paying low wages and workers would be willing to sacrifice if they knew their bosses were sacrificing alongside them. This would make local manufacturing much more competitive and enable startup entrepreneurs the space to “slum it” until their business takes off, at which time he/she would have to raise the workers wage in order to earn more him/herself.
“Wage Compression” is also a far more efficient means of distributing wealth than our current model of taxation and welfare for the following reasons. Firstly, with taxation, the government is the “middle man” between the rich and the poor. Government is very ineffective at distributing that money to where it is really needed. Wage compression takes out the “middle man”. Secondly, without wage compression, taxation increases inequality, because employers end up compensating for high tax on their income by paying themselves more, and to afford this, they must pay their workers less. Thirdly, the tax-to-welfare model creates a culture of dependency whereas “Wage Compression” shows workers the true value of hard work by rewarding them appropriately for it. In fact, because Wage Compression distributes wealth, there will be less need for welfare and therefore less need for taxation. Less taxation will boost the economy by making business cheaper and more competitive. The best part about Wage Compression is that it is completely Non Racial. It creates a culture of respect, goodwill and prosperity, in which social ills like crime and violence decrease dramatically. It brings people together, whereas race based BEE continues to divide us into race and gender categories, as recent events have proven.
Wage Compression has been implemented in Norway for decades and they now have the highest per capita income in the world! If the most successful country in the world does it…shouldn’t we?
It really works. Lets do it.” – Buddy Wells
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