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Creation of cheap labour a means to profits: Marikana mineworkers massacre in South Africa

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A long history of private profits from South Africa’s abundant mineral deposits has marched arm in arm with generations of cheap labour. The August 16 massacre of 34 people at Marikana mine is no isolated incident: for a social and economic system that is geared to ever expanding profits as a fundament of its daily calculus for existence, 'community resistance' is a necessary cost for making money and concentrating profits.

The Marikana mine massacre took place during a strike by 3,000 miners employed by one of the world’s largest platinum producers, Lonmin Plc. Miners were surrounded by police, cut off from nearby homes and communities by armed men and razor wire, in order to force workers to end their strike and return to work.

Lonmin Plc's 2011 revenues equates to an average of $71,665 per worker, if the money was divided equally between individuals (Calculated from the total 2011 revenue of $1.992 billion divided between 27,796 employees. The numbers are from MarketLine's profile of Lonmin Plc). Those rock drill operators who were massacred by police on August 16 were paid a very small fraction of this total, only $3,600 to $6,000 each per year (Calculated from the monthly wage range of rock drill operators: $300 - $ 500). The more the workers are paid, the less can go to pay for the enormous profits of top investors and executives, such as the executive director's nearly $884,000 in compensation (This is the total cash compensation and does not include possible stock options). This is the simple recipe for the concentration of wealth: in the extreme, the chief executive earns the same as about 245 rock drill operators combined.

"My husband has worked here for 27 years -- waking up at 3 a.m. and returning at 2:30 p.m. He earns 3,000 rand [$364] a month. What clown would earn so little and not protest?" said one woman in a group of sisters, wives, and daughters who, on August 18, were grieving for and protesting against the death and punishment of striking miners.

The costs of protest, discontent, and resistance to poor living conditions are accounted for in corporate calculations of doing business. This is a consequence of disciplining workers living under the enforced conditions of cheap labour. How could those who work long hours at a difficult and dangerous job willingly choose to receive wages that can fail to cover adequate living costs while they and family of all ages live in shacks that may have no electricity or running water?

Lonmin's publicly available business review tracks such things as "labour and community unrest" as a production interruption. Lonmin and its previous incarnations have been in the South African mining business since the time of apartheid, and it's had its share of experience with community and labour unrest. "Communities impacted upon by mining and who make way for mining are no longer prepared to accept the status quo," said the executive director of the Bench Marks Foundation in an April 2012 statement in its review of South Africa's communities affected by mining (From the Bench Marks Foundation media statement, 'Communities impacted upon by mining want real holistic development.' 23 April 2012).

The status quo is such that the business of mining generates billions of dollars in revenues while local communities are left to suffer the negative environmental, economic, and social consequences.

A detailed Bench Marks study of platinum mining had this to say:

"Regarding Lonmin’s operations some of the key problems highlighted by the report include a high level of fatalities, very poor living conditions for workers, community demands for employment opportunities and the impacts of mining on commercial farming in the area. Almost a third of Lonmin‟s workforce is contracted labour, and community demands for employment have lead to protests and unrest...

"Commercial farming in the Marikana area has been negatively impacted upon by the mining activities here. As the mines buy more land, the farms that remain become isolated, and suffer under the environmental impacts of mining on the quality of the water sources in the area."

This is the immediate context leading up to the August 2012 miners' strike at Marikana mine, for which dozens of miners were punished with injury and death. The 3,000 striking miners have demanded a wage increase to 12,500 rand a month, about $18,000 per year. As observed in an article by Jon Soske, such a salary is about the same as the average income of white South Africans. The miners, then, have set their sites on an equal share of income with the average white South African.

Compare such a demand with the growing annual revenues from mining the country's platinum-group of metals: $13.3 billion in 2011. Not only is this big business, it's a growing business whose expansion is predicted to accelerate and lead to $15.6 billion in total revenues by the end of 2016 (From a Research and Markets report on Platinum-group Metals in South Africa).

This is the condition in South Africa's mining sector under a business and social model whose goal is perpetually expanding profits directed by a concentrated band of investors, company executives, and financiers. This is the structure in which is found the enormous gap between the incomes of rock drill operators and Lonmin's executive director. Such disparity in wealth and power, and its underlying system of logic, is not unique to just one country.

Since the late 1970s, the world's then largest economies in the 'west' have suffered from wage stagnation for the vast majority of the population along with an increasing concentration of profits in the hands of an exclusive and relatively tiny portion of the population's already wealthiest people. Increasing individual and household debt has been used to partially deal with this decline in real wealth (Richard D. Wolff, is among the numerous economists to have detailed this account).

In the USA, the world's richest country, the average chief executive earned 231 times more than the average worker in 2011, according to a study by the Economic Policy Institute.

S'bu Zikode, the chairperson for Abahlali baseMjondolo, an organized shackdwellers movement has this to say about the struggle for dignity and freedom in South Africa: "For us time has been a very good teacher. People have realised so many things. We have learnt from the past -- we have suffered alone. That pain and suffering has taught us a lot. We have begun to realise that we are not supposed to be living under these conditions. There has been a dawn of democracy for the poor. No one else would have told us -- neither our elected leaders nor any officials would have told us what we are entitled to. Even the Freedom Charter is only good in theory. It has nothing to do with the ordinary lives of poor. It doesn’t help us. It is the thinking of the masses of the people that matters. We have noted that our country is rich. More airports are being built, there are more developments at the Point water front, more stadiums are being renovated, more money is floating around[...] But when you ask for what is basic you are told that there is no money. It is clear that there is no money for the poor. The money is for the rich. We have come to the decision of saying 'enough is enough.' We all agree that something must be done."

Such a lesson has wide application.

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