Mine workers have seen significant wage growth since Marikana, but social burdens undermine gains

24 Jul 2022

So, wage growth in the mining sector almost doubled the rate of inflation between 2001 and 2020. In 2001, the average earnings per employee per year stood at R59,874. By 2020, that had reached R335,096, a five-and-a-half-fold increase. But it comes off grotesquely low levels.

A decade since a wildcat strike at Lonmin culminated in the Marikana Massacre on 16 August 2012, when police shot 34 miners dead, South Africa's mine workers by almost any measure are better off. And in the decade before the mayhem, their lot was also improving.

This is the picture that emerges from public data compiled by the Minerals Council South Africa, the main industry body, and Statistics South Africa (Stats SA) data on consumer inflation. It tells a story of real wage growth over the past two decades, reversing the iniquitous legacy of the past that saw decades of stagnant and even falling wages as the overwhelmingly black, migrant labour force was subjected to ruthless exploitation.

“This is because of our efforts,” Joseph Mathunjwa, president of the Association of Mineworkers and Construction Union (Amcu), told this correspondent recently at the signing of a five-year wage agreement between Amcu and Impala Platinum. The deal will see wage hikes over the next five years broadly in line with the inflation rate of 6.5% in May, mirroring a similar deal with Anglo American Platinum.

In 2014, Mathunjwa led a five-month strike against Implats, Amplats, and Lonmin. The latter’s assets have since been acquired by Sibanye-Stillwater. Mathunjwa told me that the strike served as “the foundation” for subsequent wage hikes. That point is debatable, but miners have certainly come a long way since the Marikana battle cry of a “living wage” of R12,500 a month.

Growth off a low base

Minerals Council data on the annual remuneration paid to South African miners shows it rose each year on average by 9.4% from 2001 to 2020, according to DM168 calculations. South Africa’s Consumer Price Index, by contrast, averaged around 5.5% per year over that period, calculations made from Stats SA’s historical data show.

So, wage growth in the mining sector almost doubled the rate of inflation between 2001 and 2020. In 2001, the average earnings per employee per year stood at R59,874. By 2020, that had reached R335,096, a five-and-a-half-fold increase.

With the workers at Marikana specifically, data compiled by Sibanye shows that from 2013 to 2021, the wage for entry-level workers climbed just over 90%, while cumulative CPI was 45.7%. That represents real wage growth of 44.8%.

At Marikana now, according to Sibanye, entry-level workers earn a basic monthly wage of R14,713 a month, or R177,000 a year. Other benefits and allowances bring the total remuneration and cost to company to around R24,000 a month or almost R289,000 a year.

This comes off grotesquely low levels.

In his searing book, The Night Trains, about the locomotives that carried Mozambican workers to and from South Africa’s mines – when there was still a functional rail service – historian Charles van Onselen has noted that for decades, wages for black miners declined.

“In the civilised and developed world north of the equator, one supposedly filled with ‘risk’ for nervous Americans and Europeans investing large sums of capital in distant emerging economies, it was hugely reassuring if colonial governments and those managing the mines could, between them, attempt to control at least one element of uncertainty by doing their best to ensure that wages for unskilled black workers did not rise to the point where they eroded company returns,” he writes. “In the event ... they managed, over 50 years, to lower them continuously.”

This wage decline for black miners was first uncovered by Francis Wilson in the late 1960s. The 1970s would see the initial sprint of growth in real wages, spurred by a range of trends including competition from the manufacturing sector and a growing need in the face of technical change to retain skilled miners.

Wages and debt

In the 21st century, southern Africa capitalism is a very different creature.

The end of apartheid clearly played a role, setting in motion tectonic political and economic shifts. The National Union of Mineworkers (NUM), now empowered with the backing of the governing ANC party, would flex its muscles, leading to the next wave of steady, above inflation wage increases.

Ironically, the rise in living standards in the decade before the Marikana Massacre may have been a fuel for militancy as workers found their improved circumstances provided unprecedented access to credit and with that, the crushing obligation of debt.

This was a point I made three years ago when the NGO Mining Dialogues 360 provided me with previously unpublished data from a report it compiled for Lonmin.

One of the factors often cited to explain the rise of Amcu and surge of militancy on the platinum belt was worker debt and the garnishee orders enforced for compliance. The narrative holds this drove wage demands, with workers aiming for an increase that would achieve the dual objectives of bringing home more money while paying off debt.

But what came first: the debt levels or pay hikes?

One of the things the report made clear was that rock-drill operators at Lonmin – who became Amcu’s key base – were generally getting wage increases that exceeded inflation from 2003 to 2011.

And then an interesting thing happened – worker debt levels became more burdensome, not less, despite swelling income.

“The incidence of emolument attachment orders among Category 3-9 employees at Lonmin is relatively high and … has grown over the past five years from 12.6% in 2008 to 16.3% in March 2013,” noted the report.

What appears to have been unfolding – and this was not a conclusion drawn in the report – is that wage growth that accelerated beyond inflation provided many of these miners with, for the first time, a measure of disposable income. And when these miners suddenly had extra cash to spend, they were targeted by predatory lenders.

The broader point here is that the growth in worker debt before the massacre was a sign that real wage growth had already been taking place for years, while simultaneously being a catalyst for labour grievances.

Labour and investors, unite!

In the decade since, mining wages have continued to upwardly outpace inflation. Commodity prices and a return to profitability in recent years have certainly helped. And Amcu, as Mathunjwa has claimed, no doubt played a role on this stage. With his charismatic blend of intense Christian faith, African nationalism and strident anti-capitalism, Mathunjwa certainly commanded the attention of boardrooms.

But the Marikana massacre and its aftermath, including Amcu’s militancy and periodic bouts of violent labour unrest, had unintended consequences that also drove wage growth. The past decade has seen the rise of ESGs - environmental, social and governance issues - which have become all the fashion in corporate circles.

Driven by investor concerns and the wider public – and class actions such as the multibillion-rand silicosis claim spearheaded by Richard Spoor against the gold sector – South Africa’s mines have in this age of ESGs become far safer and healthier places to work in. One example of many: in the first six months of this year for the first time ever, no South African miner was killed in a fall of ground incident in a gold or platinum mine.

One reason for this has been a pivot to mechanisation where the geology allows, and mechanised mining is simply much safer for the obvious reason that machines replace humans. Mechanised mining also requires higher skills and pays better wages than what obtains in conventional mines.

Marikana and subsequent waves of strikes and unrest were also a trigger on this front as companies such as Anglo American Platinum (Amplats) and Gold Fields strove to reduce their exposure to labour-intensive operations.

Failing state, failing economy

The bottom line is that miners are much better paid and work in safer and healthier conditions than they did when the tragic events around Marikana unfolded a decade ago. There have also been improvements in housing conditions with the phasing out of the hostel system, which was designed to control a migrant labour force.

Other trends linked to state failure and its evil twin, economic failure, have undermined these impressive gains.

In 2016, the Minerals Council estimated that a South African mine worker had on average between five and 10 dependants. Such a wide range suggests a thumb-suck, but the general consensus is in that park.

And while there is no hard data on this issue, since 2016 one can only assume that the number of dependents relying on the mining sector’s wages has risen. Population growth has exceeded woeful economic growth, while unemployment and poverty have been on the rise.

At the end of 2016, the unemployment rate was 26.5%. In the first quarter of this year, it was 34.5%, having hit a record 35.3% in the fourth quarter of 2021. The unemployment rate by the wider measurement – which includes discouraged jobseekers – is 45.5%.

Poverty has also spread since the start of the pandemic. The often poorly conceived lockdowns to contain it destroyed many businesses and hundreds of thousands of jobs.

Malnutrition has been climbing and children have starved to death in the Eastern Cape, as my colleague Estelle Ellis has shockingly reported. Areas of deprivation include former “labour-sending” areas where older miners especially would still have dependants. Earlier this year, Stats SA released a report on food security that estimated that the percentage of South Africans experiencing “severe” food insecurity had more than doubled to 14.9% in 2020 from 7% in 2019.

“Lockdowns triggered by the Covid-19 pandemic caused major economic disruptions and contributed to loss of livelihoods and income. Between 2017 and 2020, household unemployment [no member of the household was employed] in SA increased,” Stats SA said.

The Eastern Cape and the North West were two of the provinces with the highest percentage of households without an employed person – 47.3% and 43.0%, respectively. Mine workers do not just provide for their own households but wider kinship networks, and many such dependants would be found in both provinces.

The report also noted a decline in household food production in rural areas. Fewer than 20% of South African households now produce their own food, and many of these would also be found in the old “labour-sending” areas in the former homelands.

“In the past, mine workers would have a life at the mines and in the rural areas where they came from like the Eastern Cape, they had a plot of land and cattle. But that rural economy has completely collapsed,” Crispen Chinguno, a senior lecturer at Sol Plaatje University in Kimberley, told DM168.

It seems safe to assume that some among the swelling ranks of the hungry will depend on a mine worker for food on the table.

So, while miners may be taking home more pay, they almost certainly have growing burdens. Inflation in June accelerated to 7.4%, its highest level in 13 years, fanned by rampaging food and fuel prices. Miners may be in many ways better off than they were a decade ago, but it may not always feel that way. DM168

This story first appeared in our weekly Daily Maverick 168 newspaper, which is available countrywide for R25.

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Business Maverick

Growth off a low base

Wages and debt

Labour and investors, unite!

Failing state, failing economy