“This year’s annual wage negotiation round is turning out to be one of the most difficult on record.   It coincides with two broader political and economic factors, which have tended to worsen the intransigence of labour and management — local government elections and the generally poor state of the economy”.

“What should be done?   The reflex position of business is that trade unions need to reassess their wage demands and, in this particular case at this particular time, that conclusion is inescapable: the unions really do need to get a grip.   The country cannot afford such extravagant increases, and union leaders should know that.   Either they don’t care about the consequences or are looking for a political confrontation”.

The editorial in Business Day today highlights an issue of grave concern to the country – Wages: unions must get a grip.

The extracts are from the editorial which should be read in its entirety.

Here are some of the demands and the one response:

  • 18% across the board – SAMWU (South African Municipal Workers’ Union).
  • 18% across the board – IMATU (Independent Municipal and Allied Workers’ Union).
  • 4,8% – government’s’ response.
  • 20% – NUMSA (National Union of Metalworkers of SA)
  • 14% – NUM (National Union of Mineworkers).
  • 10 – 17% across the board on the minimum wage – SACTWU (South African Clothing and Textile Workers’ Union).

“… there are two obvious problems.   The first is that workers have apparently got used to the notion of wage increases substantially higher than inflation.   The second is that it is much easier for business to capitulate to higher than inflation wage demands in the context of a growing economy.   SA’s growth over the past two years has been anaemic, and this is starting to be reflected in profitability, with the result that neither business nor the government is in a mood to compromise.   In some cases, they are anyway not in a position to do so”.

“The predicament of clothing workers in Newcastle highlights the extraordinary decision by the government to start closing down factories that are not compliant with minimum wage regulations, against the wishes of many employees.   Fully half of the companies in the sector are not compliant and insist they cannot become so and remain viable financially.   Only 40% of the companies that were threatened with closure last year were able to meet the end-March deadline of being 70% compliant”.