Man loses to machine

The son of a blue-collar artisan, I shudder every time I hear about job losses in the manufacturing or engineering sectors.

When big companies retrench a few hundred workers it makes the news. When smaller, unlisted businesses let a few dozen employees go it doesn't merit so much as a footnote in newspapers.

Recently, as the MD of an engineering business told me about his sector, I remembered my old man's anguish when he got the sack and my teenage fears about how we were going to survive .

The MD told me how the Chinese were eating what used to be his lunch. In the past year, he said, his company had lost out on half a dozen tenders, five of them to Chinese bidders. The Chinese benefit from subsidised electricity and steel and from cheap labour.

So either Engineering Boss Guy threw in the towel or he found a way to compete with the Chinese. In the last year, he said, he and his executives had lowered their cost of production by a third. Now, when you've been in business for decades and you can suddenly make your stuff a third cheaper, that's pretty monumental. How did the business pull that off?

The MD told me they'd done it by buying loads of fancy machines. And the machines had changed the way the company worked, to the point that it could now compete with almost anyone. Plus, the quality of its work was better than ever.

Great story but there was a catch. In the year that this business was being turned on its head it had reduced its workforce by half. By mechanising, it had let go of several hundred workers.

A few days later, the MD of another business told me about the fancy imported agricultural equipment his company was selling. If we thought farming was one sector that was always going to be labour-intensive, it turns out we were wrong. This company employs more than 1000 people and the MD was proud of how he had cut costs while holding onto his people's jobs. But the machine he was flogging could do the work of a few dozen farmworkers.

I keep hearing the refrain from business leaders about their "Africa strategy". In South Africa these days every man and his dog has an "Africa strategy", but when you unpack this you discover local business wants to do as little business in South Africa as possible. They don't want to invest here because our political leadership stops dithering only when it engages in a bit of personal looting. And we have a trade union movement too invested in Stalinist rhetoric to give two hoots about its complicity in destroying the creation of value.

The last thing our capitalists and entrepreneurs want to do is employ people. Our labour is expensive, increasingly unproductive and, in strike season, downright destructive. Recently our economy has grown because we consumed more, and we consumed more because the lazy civil servants blackmailed their way into getting unsustainable wage increases.

Now we have proposed amendments to the Labour Relations Act stipulating that employers must, after just three months, give casual or contractual employees all the rights conferred on full-time workers. What, you have to wonder, are our policymakers smoking?