The strike by banking staff this Friday over the loss of jobs is a self-defeating exercise that has the potential to spectacularly backfire.
The South African Society of Bank Officials (Sasbo) is the biggest union in the financial sector with 73,000 members. Its general secretary Joe Kokela said the strike would teach banks “a costly lesson” and “prove a point”.
But like so many unions – who have a limited repertoire of actions they can use, of which the strike is the most drastic – they don’t seem to understand how they are shooting themselves in the foot.
“We want to teach them a lesson to say ‘stop what you’re doing’ because, if you look at it, the fat cats are getting a lot fatter nowadays while the rest are struggling to make ends meet,” Kokela told Business Day last week.
Kokela is right that it will be a costly lesson, but it’s not likely to be for the banks. Look at the devastating effect this year’s months-long platinum sector strike had on the miners themselves, who have emerged indebted and poorer as a result.
Headlines calling it the “worst banking strike since 1920” inadvertently alert you to the outdated thinking behind the union’s actions as it does the severity of the strike.
“The banks are not co-operating, they don’t want to listen to what we have to say. By shutting down the economy, we want them to come back to their senses. We want to show that without these workers they are nothing. We are trying to call out their arrogance,” Kokela said, seemingly unaware of the irony of his own arrogance.
Job losses in all sectors are being driven by technological advances that make human roles less necessary as software automation replaces many of these functions. It’s called progress.
It’s particularly stark in banking, where the emergence of first the internet and then smartphones have overtaken the branch as the primary ways customers interact. Internet banking has been one of the biggest uses of the internet in our country, and for many years the only form of e-commerce practised by most South Africans.
When the smartphone took off – becoming our new primary computer – and banking apps became so useful, the writing was already on the wall for bank branches. That needs to be qualified because such electronic banking channels tend to be used by some parts of society more than others. In this case, banking apps are used by people who can afford smartphones and the data to use them. They tend to have the wherewithal to understand how they work and tend to be happy with this form of self-service. In essence, the middle class. Age is less of a determining factor as income because my 91-year-old mother uses her FNB iPad app with ease and has even stopped using her desktop computer in favour of this more portable device.
The big banks are not only evolving their business models towards more electronic self-service but are also potentially under threat from new banking startups that only offer such digital channels. Bank Zero – launched by former FNB CEO Michael Jordaan and a number of senior ex-FNB executives – is the best example of this new model of banking; while other players like TymeBank use the tills in Pick ‘n Pay and Boxers stores effectively as their ATMs. Meanwhile, Discovery Bank will use the lean services model that its health insurer parent has already perfected with self-service websites, apps and kiosks.
These new competitive banking startups are widely considered the reason for Standard Bank, the country’s second-largest bank, closing 91 branches and affecting 1,200 employees. But there is also our broken economy that is limping from the “nine wasted years” of former President Jacob Zuma’s ignorance of the economic impact of his maleficence.
Kokela’s anger is aimed at bank executive salaries, he says, but that kind of strike action has proved ineffective. The protracted five-month strike in the platinum sector demonstrated how self-defeating striking is now for everyone involved. Companies can prepare for the strike, but will still suffer losses that they ultimately aim to recoup. Workers however did not get paid and it was calculated it would take years to repay the loans taken during that time. The biggest losers are the workers themselves in these cases.
In part, it’s because labour organisations are stuck in the past. Striking is a labour tactic from the 19th century when there were much fewer factors involved: business that hired labour to do jobs that only those workers could do. Now, there are other ways that work can be done by computers. Workers are shooting themselves in the foot and betraying the self-destructiveness of intractable labour bosses in a modern era.
Jobs are going to be lost, that is the nature of technological change. One plough can do the work of several people on a farm, in the same way automated factories in the 1900s could produce more cars with less workers. Similarly, computers have destroyed numerous jobs (typists are hardly needed when everyone can touch type) but the computer industry has created untold new industries and new jobs.
Economists and sociologists have repeatedly pointed out that technology has ultimately created more jobs than it has destroyed. But the labour force needs to be awake to these changes, and change themselves as the nature of work changes.
Striking against job losses is like having sex against pregnancy. They will both have the same outcome.