South Africa

The Labour Ministers of South Africa, Brazil and Spain have expressed concern that labour inequality remains an unmet challenge in many societies across the world.

“The only way to address this challenge properly is to abandon traditional models and responses, such as those favouring deregulation and market-based solutions, that have already been proven not to work and to accept that an expansive social response must be consensual and shared. 

"Thus, in an expression of strengthened cooperation from three different continents, the Labour Ministers of Brazil, South Africa and Spain seek to advance towards a fairer distribution of the products of labour at a global level, adopting a common approach to tackling this problem that reflects our collective commitment to expanding labour rights the world over,” said the Ministers in a joint statement on Friday.

Luiz Marinho is Minister of Labour and Employment of Brazil and South Africa’s Minister of Employment and Labour is Nomakhosazana Meth.

Yolanda Díaz is the Second Vice-President and Minister of Labour and Social Economy of Spain.

The Ministers comments come on the occasion of the G20 Labour Ministers’ Meeting in Fortaleza.
The three leaders said the decline in labour share has been observed in many of the world’s economies, particularly since the wave of neo-conservatism in the 1980s. 

The term "labour share" refers to the proportion of national income allocated to workers in the form of labour compensation, as opposed to that going to capital owners. The decline means that a smaller share of economic income is reaching workers, with most of it being distributed as returns to capital. 
They said the undesired effects of a digital transition at the service of the few, labour flexibility and deregulation policies, and painful and ineffective austerity measures are just some of the causes behind this worrying trend.

“Such developments sometimes result in the delocalisation of production, in the absence of social dialogue and trade union participation, in the growing precariousness of working conditions, in an imbalance in collective bargaining that gives rise to low salaries or to fiscal policies that prioritize capital over work, or restrict natural growth in salaries.  Neither Brazil, South Africa nor Spain is unaffected by these trends.”

In Brazil, the recovery of the economy following the COVID-19 pandemic has been underscored by positive milestones, including robust growth of gross domestic product (GDP) and improvements in employment metrics.

Despite these positive results, enduring challenges persist within the Brazilian labour market. According to the International Labour Organisation (ILO), Brazil exhibited very slight productivity growth between 2015 and 2023 (an annual average of 0.1%), while real wages fell 6.9 % in 2023.

South Africa’s labour market is also a prime example of declining labour share. Real wages have shown significant fluctuations, failing to keep pace with steady productivity growth.

“This has led to a situation where workers are not proportionally benefiting from the wealth they help create. The volatility of real wage growth compared to productivity underscores the disparity, which has been further exacerbated by shocks like the COVID-19 pandemic, which severely impacted economic growth, job stability, and both productivity and wage levels, leading to declining living standards and economic inequality for many South Africans.”

These disruptions highlight the vulnerability of workers' livelihoods and contribute to widening labour inequality.

In Spain, productivity growth over the past few decades has been sluggish, with certain significant exceptions such as the upturn seen in 2022. However, salaries have grown at a considerably lower rate than corporate profit.

Overcoming challenges

“In order to expand labour rights, our countries must overcome at least four fundamental challenges. Firstly, we must continue to raise wages. Real wages are growing at a far slower pace than productivity. As we have already demonstrated, abandoning neoliberalism and embracing policies aimed at increasing labour compensation —and in particular the legal minimum wage— contributes decisively to ensuring that productivity gains are distributed to workers, reducing inequality and the scourge of the gender pay gap. We are committed to doing what we know to work.”

The Ministers said that while substantial progress has been made in terms of equality and diversity in the world of work, there are major challenges that must still be overcome in order to ensure that all people —irrespective of their gender, race, sexual orientation or gender identity— enjoy equal opportunities, fair treatment and decent working conditions.

“Thirdly, the digital transition must be just, and workers’ individual and collective rights must be safeguarded throughout. We must make certain that digitalisation is placed at the service of decent work and not the other way around, ensuring that the use of technology makes human work less onerous.

“Fourthly and lastly, we must combine our efforts to strengthen collective bargaining, halting, once and for all, the continuing decline in its coverage rate across the world. In this regard, we have trust in social dialogue as a powerful tool for mutual understanding and collaboration and thus as a means of achieving better living and working conditions.”

“This is why, today, the Labour Ministries of Brazil, South Africa and Spain —reaching across the traditional and antiquated North-South divide— have agreed to establish a permanent and strengthened framework of collaboration and exchange on social and labour matters between our countries.”

According to the Ministers, the framework will guide policies in defence of increasing labour participation to ensure that workers receive a just share in national wealth.

“In short, Brazil, Spain and South Africa will advance towards a new labour international, a global alliance that is fully aware that the major challenges to be overcome —the climate crisis, rising inequality, the erosion of democracies— must be tackled by expanding labour rights, and not by cutting them,” said the Ministers in the joint statement. -SAnews.gov.za