Government Policy and African Wages inRhodesia.P. S. HarrisDepartment of Economics, University of Rhodesia, Salisbury,In presenting the 1971 Budget to Parliament,the Minister of Finance recognised the failureof the wage sector of the economy to generateemployment opportunities at a rate adequate tocater for Rhodesia's rapidly expanding Africanpopulation.1 The remedy envisaged was to forcean increasing number of Africans to seek alivelihood in the Tribal Trust Lands, and thisshift in emphasis has largely been followed byofficial pronouncements on the economic stand-ing of the African community. The wage sec-tor will, however, continue to play a funda-mental role as an employer of African labour,and must be analysed in this light. At present,over 800 000 Africans are employed in thissector,2 and since over 50 per cent of theAfrican population are under seventeen yearsof age,3 approximately 30 per cent of Africanadults are therefore directly employed in thecash economy.The percentage of African households de-pendent either totally or partially on incomefrom employment in the cash sector is moredifficult to estimate, but could possibly be ashigh as 55 or 60 per cent of the total. The cashsector in the European areas of Rhodesia isthus of great importance to the general well-being of Africans, and conversely the supply ofAfrican labour is of fundamental importance tothe continued prosperity of the sector.There are many complex factors that in-fluence the level of earnings of any sector ofthe population at any point in time, and adetailed investigation of only certain of thesefactors inevitably runs the risk of being mislead-ing by over-simplifying the situation. As faras African wages in Rhodesia are concerned,the structure of the economy itself and the levelof economic activity at any time will be theprimary determinants, but institutional andsocial factors will also influence the level anddistribution of these wages.The intention in this article is not to playdown or disregard the importance of some ofthese factors, but rather to attempt to examinein depth one related aspect of them: govern-ment policy and its effect on African wages inRhodesia. Admittedly this treatment is incom-plete, but an attempt to briefly survey all of thevariables would have to be so vague, generalisedand over-simplified that it would be of evenmore limited value.More specifically, attention is given to the ratesof growth of wages in the higher income groups.This focus of attention is justified on twogrounds. Firstly, political power in Rhodesia isallocated pro rata with earnings. Under theexisting constitutional mechanism (Act 54 of1969) this allocation is indirect via the incometax contributions of the major racial groups.39Under the constitutional mechanism proposedfor an Anglo-Rhodesian settlement in 19714enfranchisement would be directly related toearnings, and the demarcation of political powerbetween the racial groups will depend on theaggregate numbers thus enfranchised in eachracial group. Secondly, the development of astable urbanised industrial class must be pre-ceded by a growth of earnings that will enablesuch development. For purposes of definition,those Africans receiving cash wages in excess of$150 per month may be regarded as high-incomeearners, whereas those receiving between $90and $150 would be classified in the 'inter-mediate' income group.The term 'government' is used in this articlein its broadest sense, and incorporates the legis-lative, executive and administrative process ofgovernment. Government 'policy' as applied tothe determination of the level and distributionof wages is employed in both a broad and anarrow sense. The narrow sense of the defin-ition limits relevant policies to those governmentactions that deliberately interfere with the freeplay of market forces in the determination ofwages, whereas the broad sense of the definitionembraces all government actions that are effec-tive in this respect. Thus, there need not bespecific legislation, nor a declared intention toimplement a specific policy before 'policy' iseffective. Administrative tradition or style canbe just as effective as amendments to thestatutes.Ideally an investigation into policy influenceson wages must take into account general poli-cies that influence the level of economic activity.This type of approach in Rhodesia would de-mand an appraisal of government's strategy foreconomic development. In particular, the lackof any formalised, systematic development plan,incorporating a categorisation of objectives andpriorities would be the primary target of suchan investigation.5 Development planning is un-doubtedly a critical factor in wage determin-ation, but wages would normally form only oneconstituent element of a development plan,and planning as a policy measure is perhapsbest left to a fuller treatment as a separate,self-contained issue. The 'policies' that will bereferred to are therefore specific, rather thangeneral policies, and are those that are moredirectly associated with the labour market thanwith issues of broader, or more general rele-vance.The first of these concerns the policy ofgovernment towards organised labour under the'umbrella' of the Industrial Conciliation Act(29 of 1959). This Act, which lays down aprocedure by which industrial disputes aresettled, envisages implicitly the establishment,within industries, of employment principles. Themore important principles concern the questionsof the rate for the job and of job fragmentation,which although ostensibly are decided by ne-gotiation between employer and employee rep-resentatives, are actually directly influenced bygovernment attitude, and government policywith respect to both training of labour and theimportation of skills.Thus, the immigration policy of the govern-ment must also be examined. Immigrants in-fluence wages in a variety of ways, and theEuropean immigration policy is the second majorspecific, policy to be investigated.The earning capacity of Africans is, to anextent, related to the skills that they acquire,and hence the vocational training programmeof government becomes an important policyvariable in wage determination. Finally, govern-ment itself is a very influential and importantemployer of labour, and more particularly ofhigh-level manpower, and the employmentpolicy of the government completes the policyspectrum for the purposes of this discussion.These four policies of industrial employmentpractices, immigration, technical training andcivil service employment, are closely inter-dependent, and although a, sequential treatmentof them will be attempted, their over-all inter-dependence should be borne in mind.THE AFRICAN WAGE SECTORIn 1970 an average of 725 000 Africans wereemployed in the wage sector, earning$226 400 000, or an average of $312 per em-ployee per annum. By comparison, 103 500Europeans, earning $321 400 000 or an annualaverage of $3 104 per employee were similarlyemployed. These figures exclude self-employedpersons and Africans employed in the Africanrural areas.6The general pattern of earnings has, more-over, been changing. From 1961 to 1970, num-bers of Africans in employment increased by15,4 per cent, average earnings by 52,9 percent, and total earnings by 76 per cent. Againstthis background, the cost of living, as measured40by changes in the consumer price index forurban Africans, rose by 20,6 per cent.These aggregates, however, mask importantdistributional patterns. In 1970, average annualearnings in the agricultural sector, for example,were $153, compared with $714 in the Finance,Insurance and Real Estate sector. The slowestrates of growth of average earnings, 1961-1970,were recorded in the Agricultural (25,41 percent) and Private Domestic Service sectors(30,61 per cent). The most spectacular com-parable growth rates were 134,9 per cent and133,5 per cent in the Finance, Insurance andReal Estate and Health Service sectors re-spectively. These latter magnitudes should,however, be interpreted cautiously, since verysmall numbers are employed in these sectors,and hence relatively minor changes in salaryscales, or changes in industrial classificationcould have a large proportional influence onsectoral averages. Moreover, these sectors em-ploved only 10 300 Africans between them in1970, and they will therefore have a relativelyminor impact on the African wage sector.The largest increases in average earnings overthe decade in the sectors employing a significantproportion of the African labour force wererecorded in the Construction and Distribution,Restaurants and Hotels sectors. The increaseswere 78,3 and 73,2 per cent respectively. Themanufacturing sector is widely regarded as thatsector in which the most outstanding growthhas taken place in recent years, and although itis true that this sector has, since 1.963, shown thelargest percentage expansion in terms of num-bers of Africans employed, average earnings in-creased by only 67.7 per cent over the decadeunder consideration. In terms of employmentopportunities, growth in recent years has centredon this and on the Construction sector.A detailed breakdown of earnings by incomegroup and within each sector is not availablein an unbroken annual series. There was aCensus of Employees conducted in 1961 and in1969, but the detailed results of this latter sur-vev have not yet been released.7 The quarterlyemployment enquiries initiated by the CentralStatistical Office in 1959 neither cover as wide apopulation, nor seek as detailed information, asthe Censuses, but the wage data collected in theJune. 1971, enquiry are extremely valuable.8Details of cash wages earned during the monthof June, 1971. cover an estimated 722 410African employees, or 90 per cent of the total.Within this group, 35,17 per cent of the popu-lation received a cash wage income of less than$10 per month, and a further 39,41 per centbetween $10 and $30 per month. Overall,92,61 per cent earned less than $50 per month,and only 0,43 per cent in excess of $150.The June 1971 wage data point to one over-whelming conclusion with regard to high in-come earners. High incomes are earned incomparatively few industrial sectors. Seventyper cent of the 3 090 high income earners wereemployed in the Education, Construction andHealth sectors, whereas in aggregate these sec-tors employed only 10,6 per cent of the totalnumber of employees surveyed. The inter-mediate income earners, on the other hand,are more evenly distributed throughout the sec-tors, the exceptions being the agricultural, pri-vate domestic services and mining sectors.The possible reasons for this distribution,specifically in the context of government policy,will form the basis of the remainder of thispaper.DIRECT POLICY INFLUENCESThe Industrial Conciliation Act forbids theformation of racially exclusive trade unionsin Rhodesia, but allows the formation withinspecific industries of unions segregated on thebasis of skill. In practice the 'skilled' unionshave tended to be European dominated, where-as the 'unskilled' unions have been almost ex-clusively African. The skilled or 'white' unionsare thus forced to operate on two fronts. Theyhave to mount the traditional offensive of or-ganised labour against capital, but at the sametime must fight a rearguard action against work-ers of a lower order of skill.These unions have maintained their com-petitive position by insisting on the implemen-tation of two basic industrial labour policiesŠŁ that of the rate for the fob, and that of nofob fragmentation. The policy of the rate forthe job implies that workers performing similartasks must be paid comparable wages, and nowrorker should receive a lower wage on anydiscriminatory basis. This ostensibly liberalpractice in fact protects skilled white workers,since if emplovers (who are predominantlywhite) have no cost benefit to derive from theemployment of African artisans, they will, inthe main, succumb to social pressures and allowpersonal prejudice to influence the racial com-ponent of their labour forces. African artisans41are prevented from overcoming basic racialprejudice by offering their services at cheaperrates; and the white workers3 via a form oflabour resale price maintenance, maintain anon-competitive wage structure in each industry.By influencing the rate at which additionalworkers acquire skills and enter the industry,and also by exerting pressure to maintain theexisting racial composition of the new intake,the skilled unions reinforce their initial strategicadvantage. This advantage, however, can onlybe maintained with the aid of the supplemen-tary policy of no job fragmentation.If the tasks performed by the skilled workersare 'fragmented', so that a number of semi-skilled workers perform more limited aspects ofthe over-all function under qualified supervision,the number of opportunities for the skilledworkers contracts. Certain job types do not per-mit any meaningful degree of fragmentation, butothers, particularly in the construction andtransport sectors, can be fragmented without anyreal risk of lowered standards and with signifi-cant cost advantages being reaped. The semi-skilled (usually African) worker, thus posesa major threat to the monopolistic power of thewhite unions, provided that production tech-niques in the industry within which he workscan be altered to cater for fragmented tasks.In general terms, employees will tend to seekto implement these lower-cost productionmethods, whereas the unions will attempt to re-sist such implementation.'The role of the government, in what isostensibly a purely private sector conflict, issomewhat difficult to define. In the first in-stance, government attempted, by convening aconference between employer, employee andgovernment representatives, on 1 and 2 April,1971, to find a compromise solution to the con-flict.10 At the conference, the employers insistedthat the supply of skills was so limited that thecontinued growth of the economy could notproceed without the introduction of changedtraining and production methods. The unions,on the other hand, denied the existence of anyshortages of skills, and the unyielding premissesfrom which the two parties operated did notenable an agreement to be reached. The govern-ment, in its attempt to provide detailed infor-mation as a means of breaking the deadlock,has set up a committee to investigate the allegedshortage of skills. This committee has not, asyet, reported, and in the absence of a final de-cision on the current dispute, the government atpresent continues to support the dual policies of'rate for the job' and of 'no job fragmentation'.11Any change of that policy will have a significantbearing on the actual policies implemented inthe private sector. The power of governmentover the unions has in fact been recentlyincreased by the Industrial Conciliation Amend-ment Act (No. 79 of 1971) which was recom-mended to the House of Assembly as having 'theeffect of removing the right to strike . . . whenthe President is satisfied that a strike . . . wouldprejudice the public interest'.12 The final attitudeof government towards the industrial conflictwill have far-reaching consequences and will bea major factor influencing the structure ofwages in the economy.Allied to this question is the policy of pro-moting European immigration, since this policymust provide the source of supply from whichtemporary shortages in skills may be relieved.A closer scrutiny of this policy is therefore re-quired.IMMIGRATION POLICYThe present policy of encouraging Europeanimmigrants into Rhodesia stems from a decisionin April 1964, to establish the Ministry ofImmigration and Tourism, the Department ofImmigration Promotion being the agent specifi-cally responsible for implementing the policy.13The basic rationale behind this policy was atfirst rather vaguely formulated, and rested onthe almost completely unsubstantiated assertionthat 'large numbers of European immigrantswill not only provide employment for Africans,but will be in a far better position to meet thecost of essential services required in their generaluplift to civilized standards'. Expenditure onimmigration promotion was, moreover, regard-ed as a sound financial investment from thepoint of view of the exchequer. It was reasonedthat since, in 1964, the per capita tax contribu-tions of Europeans were £286 per annum, andthe estimated cost of bringing one immigrant toRhodesia was on average £100, expenditureswere soon recovered, and long-term benefit se-cured. In 1967 this somewhat simplistic analysiswas replaced as the justification for the policy bythe more professional interpretation of J. L.Sadie, then economic advisor to the Govern-ment. In his report Sadie argued that a linearfunctional relationship existed between thenumbers of employed Africans and Europeans,42and that the co-efficients of the parameters inthe equation would indicate that one Europeanworker is required, on the average, for theemployment of each 7,4 Africans in the modernsector of the economy.14The causal basis of this function and thepossible reversibility of the parameters have notbeen adequately explained, but it is not thepurpose of this article to question the concep-tual, statistical or prescriptive implications of themodel.15 The point to be made is that theSadie report reinforced the determination ofthe government to pursue this policy, and thisdetermination, coupled with changing circum-stances that have made promotion programmesmore effective, has resulted in high and increas-ing levels of net immigration of Europeans intoRhodesia since 1967. The policy of immigra-tion promotion functions on both an official anda voluntary level. On the official level, an assistedpassage scheme, a limited but expanding sub-sidised housing scheme, a placement sendee,and generous customs and income tax con-cessions are all employed to encourage immi-grants.16 On the voluntary level, the Welcometo Rhodesia Association attempts to ensure 'thehappy absorption of ... new Rhodesians . . .into the local community'.17 The actual ad-vantages and disadvantages of this policy are,however, best evaluated by reference to theactual factors likely to induce migration.Migration studies have been conducted in anumber of countries by a team of analysts fromthe University of Athens in Ohio.18 They con-clude that migration is a function of three pri-mary influences: the employment opportunitiesin the country of emigration as compared withthose in the country of immigration, compara-tive wage rates in the two countries, and thecost of moving. Governments have relativelylittle scope for influencing the first two of thesevariables, but by assisted passage schemes areable to reduce the cost of moving. Thus, immi-grants tend to be secured at a cost, and areattracted to a country during times of economicbuoyancy.During a phase of expansion, any economywill tend to experience temporary shortages ofskilled labour, and since these conditions areconducive to the stimulation of immigration,these shortages may be overcome by a selectiveimmigration policy. Immigrants are of valueinsofar as they have acquired skills at no costto the country taking advantage of those skills.In addition, the country of immigration acquiresskills without the gestation period normally as-sociated with training, and as a result temporaryshortages of specific skills do not inhibit eco-nomic growth. Thus, in certain circumstancesimmigrants can and do have both an income andemployment generating impact on the economy,but this observation does not in itself lend sup-port to the existing immigration policy in Rho-desia.An immigration policy will tend to be of mostbenefit if the immigrants are carefully selectedto fill existing vacancies, and if, in fact, they areencouraged only when skilled labour is in shortsupply. A continuous and essentially non-selective policy can have harmful effects. Duringtimes of recession or stagnation, immigrants, ifsuccessfully recruited, compete with local per-sonnel for the available employment vacancies.This problem, however, is of relatively minorimportance. The real danger behind a con-tinuous and non-selective policy is that thecountry comes to regard immigrants as a sourceof supply of skills, and fails to adequately de-velop training facilities domestically to producethose skills. From a strategic point of view, thistype of policy is extremely dangerous. If anycountry fails to take positive steps to ensurea continuous and expanding flow of skilledpersonnel from within its borders it remainsvulnerable to the vagaries that characterise theinternational mobility of labour. In specificterms, the emphasis on immigration in Rhodesiameans that insufficient attention is being givento producing the skills required from amongstthe African population.A closer examination of the occupationalclassification of net immigration into Rhodesiaduring 1971 reinforces this observation. Rhode-sia gained 9 460 Europeans by net migrationduring 1971, of which 3 755 could be describedas economically active. Of these 250 werefemale, and 213 of this group were clerical orsales workers. Of the 3 505 males, 1 953 wereclassified as 'production and related workers'and a further 629 as clerical, sales or serviceworkers. Only 667 were classified as 'pro-fessional, technical and related workers'.19 Itmay be argued that Rhodesia should, at thisstage of its development, be considering thetraining of professional and technical workersin sufficient quantities to satisfy the needs ofthe expanding economy, but even the less43specialised tasks in the economy continue to beperformed by immigrants.The entire question of immigration is insep-arably bound up with training facilities for thelocal population, and hence that aspect of policymust now be considered.AFRICAN VOCATIONAL TRAININGThe present day structure of African edu-cation is particularly pertinent. In 1971 therewere 637 423 pupils in the primary schools and26 183 in the secondary schools. Facilities forthe technical training of Africans are, moreover,extremely limited. Of all African pupils in1971, only 885 were in schools that could beclassified as Technical and Vocational Schools.20The level of technical instruction varies betweenschools, but is not particularly sophisticated inany of them. This shift in policy reverses trendsthat were evident in the early years of the de-cade. Luveve Technical College in Bulawayowas established, for example:(a) to demonstrate the capacity of Africansfor training in modern technical occu-pations,(b) to provide possible staff for the tradeschools which it was thought would beneeded to train workers in the thenrapidly expanding industries, and(c) to train apprentices on the basis of twoyears of full-time initial training.21In his report for the year ended 31 December1963, the Secretary for African Education ob-served that 'the first objective has been achievedwith great credit'. Despite the initial success ofthis college, it was closed in 1964 and convertedto a technical high school.22 The reasons givenfor closure were that apprenticeship traininghad become non-racial and that students whowould normally have studied at Luveve couldbe transferred to the Salisbury and Bulawayopolytechnics.The net result has been that formal appren-ticeship training in all but the Construction sec-tor has been effectively denied to Africans. Ofthe 1 582 apprentices at present under instruct-ion at the Salisbury polytechnic, 139 are Afri-cans, and these are almost exclusively in thebuilding industry.23 On-the-job training canonly produce a very limited level of skill unlessthat training is formalised in some way- En-trance to formal apprenticeships is significantlyinfluenced by employer discrimination, andhence a greater reliance than normal has to beplaced on state sponsored technical schools andcolleges if the government wishes to overcomeexisting restrictions. It is not unreasonable tosuggest that the lack of adequate trainingfacilities for Africans is possibly the most import-ant single factor restraining African advance inthe wage economy.Despite this lack of suitable technical trainingfacilities, the educational system does generatea reasonably large annual supply of potentialclerical and administrative workers. The em-ployment policy of government itself is thus ofimportance in the field of high level manpower.The government is an important employer oflabour, and more specifically of high level man-power. According to the 1961 Census of Em-ployees, 14.75 per cent of all African and 37,12per cent of all European employees were em-ployed by either central or local government orby statutory bodies. In aggregate, these per-centages are important, but the earnings ofthese employees are even more significant. Dueto a change in the form of presentation of data,the latest information is not available, butduring the year ended 31 March, 1967, 17 566out of a total of 63 011 individual income taxpayers with main income from employment weredirectly employed in the government service.24Since employees in quasi-state bodies are exclu-ded, this statistic understates the influence ofgovernment as an employer of high-level man-power. A change in the racial composition of thecivil service, engendered by a change in employ-ment policy, would have very widespread conse-quences. Such a change, however, requires deter-mination and careful planning. T. G. Luke, whoinvestigated the question of localisation in theCivil Service on behalf of the then Bechuana-land Government warned that 'it is dangerousto attempt to localise without at the same timeensuring that there is a rapidly growing supplyof good quality nationals to be fed into the de-veloping, and often escalating, system, as exist-ing officers and employees are promoted to high-er grades'.23A policy of localisation in the Civil Servicewould therefore have to be carefully plannedand co-ordinated with a training programme de-signed specifically to satisfy projected man-power requirements. There is no evidence ofthis type of strategic planning within theRhodesian Civil Service at the present time.44CONCLUDING PERSPECTIVESIt was noted that the important sectors asfar as African high income earners were con-cerned were the construction, education andhealth sectors. It is of interest to record thatin these sectors one or more of the followinginfluences are operating:(a) there are no effective white-dominatedtrade-unions working to preserve a tem-porary market advantage,(b) the job types enable a significant degreeof fragmentation,(c) there are either training facilities foremployees (as, for example, in the edu-cation and health sectors) or the exis-tence of an adequate stock of trainedpersonnel (as in the case of bricklayers,plasterers, etc.),(d) there is a relatively greater willingnesson behalf of employers to accept semi-skilled and skilled African labour, or(e) there is at present a high level of demandfor labour in the sector.This paper has discussed the impact of oneset of non-market forces on the earnings ofAfricans in the intermediate and high incomegroups. Wages in Rhodesia are influenced to avery large extent by the strategic and tacticalpolicy manoeuvres of the government. Theaccepted myth of Rhodesia's free-enterpriseeconomy should not be allowed to divert at-tention either from these policies, or from theother non-market influences.REFERENCES5,Ł yA k.Ł *6.7.3.9.10.11.12.RHODESIA 1971 Parliamentary Debates, House of Assembly, 79, cc. 600-2, 15 July.RHODESIA 1972 Monthly Digest of Statistics: January, Salisbury, Central Statistical Office [hereaftercited as M.D.O.S. 1972 January], Table 14.RHODESIA 1971 1969 Population Census {Interim. Report), Volume II: The African Population.Salisbury, Central Statistical Office (mimeo), Table 11.The Proposals were published separately by the respective Governments: RHODESIA 1971 Anglo-RhodesianRelations. Proposals for a Settlement. Salisbury, Government Printer, Cmd.R.R.46; GREAT BRITAIN1971 Rhodesia. Proposals for a Settlement. London, H.M.S.O., Cmnd. 4835.See RHODESIA 1967 Report by J. L. Sadie on Planning for the Economic Development of Rhodesia.Salisbury. Government Printer, GSR 35: see also RHODESIA 1968 Parliamentary Debates, 72, c. 464 ff.,J. J. Wrathall, 22 August.M.D.O.S. 1972 January, Tables 14-18; all earnings data are from this source unless otherwise indicated.RHODESIA 1965 Final Report, on the September 1961 Census of Employees. Salisbury, Central StatisticalOffice (mimeo).RHODESIA 1971 Wage Distribution of African Employees, June 1971. Salisbury, Central StatisticalOffice (mimeo).See report headed 'White Unions About to Explode'. Property and Finance. 1971,181.The Rhodesian Financial Gazette. 2, 9. 30 iv, 1971.IBID., 17.iii.1972.RHODESIA 1971 Parliamentary Debates, House of Assembly,_ »©» cc. 682-3, _16 November.RHODESIA 1965 Report of the Under-Secretary for Immigration and Tourism for the Year ended 31stDecember, 1964. Salisbury, Government Printer, GSR 23.14. Report by J. L. Sadie, p. 4.15. CLARKE, D. G. 1970 The Assumed Employment Generating Capacity of European Immigration in Rhode-sia. Rhodesian Journal of Economics, 4, (ii), 33-42.16. RHODESIA n.d. Rhodesia: Land of Opportunity. Salisbury, Department of Immigration Promotion.17. RHODESIA n.d. 'General Information' mimeo by Department of Immigration Promotion (G. P. & S.50096-2000).18. See, for example, CHOPIN, G. L., VEDDER, R. K. and GALLOWAY, L. D. 1970 The Determinants ofEmigration to South Africa, 1950-67. South African Journal of Economics,3S, 374-81.19. RHODESIA 1972 Monthly'Migration and Tourist Statistics for January, 1972. Salisbury, Central Statis-tical Office (mimeo),20. M.D.O.S. 1972 January, Table 12.21. RHODESIA 1964 Report of the Secretary for African Education for the year ended 31st December,1963. Salisbury, Government Printer, CSR 55, p.7.22. IBID.23. Figure supplied on request by the Salisbury Poltytechnic.24. RHODESIA 1969 Report of the Commissioner of Taxes for the year ended 30th June, 1968. Salisbury,Government Printer, CSR 5.25. LUKE, T. C. 1966 Report on Localisation and Training. Mafeking, Bechuanaland Press.13.45