Solutions needed to automation and race to the bottom

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In recent columns I have mentioned the frightening statistic from the International Labour Organisation (ILO) that, on a global level, more than 120 million men and women are now without work – and will probably never work again. This week, an updated figure arrived from the ILO: there are now more than 200 million people who are jobless and with little hope of their circumstances changing. This is particularly frightening in South Africa, where we face the prospect of thousands of jobs about to be lost in the mining sector, especially when the earnings of many of the migrant miners support 10 and more family members mostly in already impoverished rural areas. It is, of course, all part of the current, and ongoing, economic crisis. Costs are rising, commodity prices – and rates of profit – are falling, so production must be cut, shafts mothballed and miners given the sack. Such is the nature of our system, one where more media space is devoted to the fall in the exchange rate and concerns about investor confidence than to the horrendous social consequences. However, as this column, echoing a minority within the labour movement, has regularly mentioned over the years, the roots of the present crisis can be found in the “microchip revolution”; in the fact that technological development has outstripped the ability of the economic and social system to cope. However, it is a revolution that governments, companies, corporations and most trade unions have failed to recognise, let alone come to terms with.

In their frantic attempts to maintain profits, employers, such as those in the garment and footwear industries, scan the globe searching out ever cheaper labour, often contracted to produce for just a year at a time. This is the “race to the bottom” that so concerns the labour movement.

But the production of mines cannot generally be moved from one locality to another. In the case of platinum group metals (PGMs) this is especially so since South Africa effectively holds more than 70 percent of the known reserves.

The other major producer is Russia, which opens up the question about the possibility of inter-governmental co-operation to maintain market prices.

Gold, unlike PGMs, has little practical or envisaged practical uses and is, therefore, potentially prone to much more volatility than other metals. And gold, in the South African context, is being mined at extraordinarily deep levels.

The cost of mining at 3km or 4km below the earth’s crust is massively expensive. Refrigeration alone, to make the temperatures at such depths just bearable to humans, often cancels out the benefit of the higher grade ores found in ultra-deep seams.

Then there is the amount of unproductive time it takes to winch workers down to the lowest levels – and to bring them up again. Little wonder, therefore, that mining houses have, especially over the past decade, been researching methods of automation and planning for its introduction.

The move to greater automation has been ratcheted up following the wage increases won in the wake of Marikana and the softening of PGM and gold prices.

There is also an awareness across the industrial divide, that demand – and prices – are unlikely to pick up as more recycled platinum and palladium comes on to the market at a time when vehicle manufacture is, at best, stagnant.

Hopes expressed by the Department of Trade and Industry that the development of hydrogen fuel cell technology will provide a boost, particularly for platinum, are probably well placed.

But it will take years before the technology – again using platinum as a reusable catalyst – comes into widespread use.

Throughout, the pressure on profits and the need to contain costs will dominate among the mining houses.

And although the capital outlay for automation is huge, the benefits are many: machines do not go on strike, can work around the clock and in environments that humans would find intolerable.

The maintenance and operation of such machinery requires a relatively small core of quite highly skilled workers whose costs would be far less than those of previously employed miners.

But, as several trade unionists have pointed out, there are other costs that affect the country. Since such machinery is invariably imported, these purchases add to the country’s already deeply worrying balance of payments deficit.

The one union most acutely aware of this technological progression is the National Union of Metalworkers of SA (Numsa) that is now claiming, with apparent justification, to be the biggest union in the land, with a membership of some 320 000. Numsa’s stronghold is in the automotive industry, a sector that provides one of the best examples of how robots have replaced thousands of workers.

Numsa’s toehold, through metalworkers on the mines, has also now been increased to something of a foothold following the defection of thousands of former National Union of Mineworkers members either to other unions – mainly to the Association of Mineworkers and Construction Union – or out of the organised labour movement.

As a labour giant in such crucial areas of the economy, Numsa is in a position to exert considerable leverage on the government and private sector employers.

The union could hearken to voices on the fringes and campaign for a comprehensive industrial policy that might include the demand that, so far as possible, all machinery that replaces workers be manufactured locally and that retrenched workers be retrained to handle such manufacture and consequent maintenance.

But the global problem of more people and less work remains. It is summed up on a T-shirt sent to me from London. It has on the front the bearded face of Karl Marx and, underneath this, just four words in bold type: “I told you so”.

Whatever one may wish to argue about the philosophy of Marx and his collaborator, Friedrich Engels, those four words have resonance, because they refer specifically to a line they penned in 1848: “In these crises, there breaks out an epidemic that, in all earlier epochs, would have seemed an absurdity – the epidemic of over-production.”