The state workers’ strike started on Wednesday — the latest
in a wave of labour protests since May — and quickly turned violent, with
police firing rubber bullets to disperse protesters blocking roads and preventing
patients from entering hospitals.
Any agreement will likely swell state spending by about 1 to
2 percent, forcing the government to find funds to pay for the deal as it tries
to bring its deficit down from 6.7 percent of gross domestic product.
The government has repeatedly said it cannot afford the more
than double inflation wage increase demand from public sector unions. The
central bank has warned that a series of above inflation increases so far could
fan inflation.
On Friday, metalworkers’ union Numsa said 70,000 of its
members in the automotive components, vehicle repair and fuel retail industries
would strike from Aug. 30 after reaching deadlock with employers over its
demand for a 15 percent pay increase. Employers have offered 6.6 percent.
The civil servants’ unions have taken hits in public opinion
after hospital managers attributed several deaths at clinics to the strike and
domestic media reported a man with a severed hand being refused treatment at
public hospitals because there was no one who could care for him.
“The one thing that could bring the groups to their senses
is that ordinary people are being affected,” said Sakhela Buhlungu, an expert
on organized labor at the University of Johannesburg.
Chris Klopper, a spokesman for the Independent Labour Caucus
union federation, expects the government to repeat a threat to unilaterally
impose its wage raise offer on the public sector and not to bring any new deal
to the table. “Hopefully the discussions will be more positive than that,” he
said.
The public sector strike is likely to stretch into next week
but analysts see a deal coming before September, which would limit the damage
of the walk-out by police, teachers, healthcare workers, customs officers and
government clerks.
Traders say the strike has not hit daily activity in the
rand or bonds but they are worried about a labor stoppage that extends into
September.
“It just slows down business in general because lots of
businesses rely on state entities to get their funds,” said Ion de
Vleeschauwer, chief dealer at Bidvest Bank.
“It might not be evident now, but a couple of months down
the line we will see the effect of the slowdown in economic activity affecting
us,” he said.
Finance Minister Pravin Gordhan said on Thursday he did not see
a protracted strike as having a major economic impact.
State workers’ unions are demanding an 8.6 percent pay rise
and 1,000 rand ($137) a month for housing.
Last week the government raised the housing allowance to 700
rand from a previous offer of 630 rand, but refused to increase its wage rise
offer of 7 percent. Annual inflation stands at 4.2 percent.
The housing allowance alone would be equal to about 1
percent of all budget spending and the government has said it does not have the
money to pay more.
Autoworkers and car manufacturers on Friday reached a wage
deal to end an eight-day strike which led to lost production of about 17,000
vehicles, employers body AMEO said.
Around half of South Africa’s annual production of vehicles
is exported to other African states, Europe and North America.
The Automobile Manufacturers Employers Organization said it
and union Numsa signed a 3-year wage agreement which will see workers getting a
10 percent increase this year, and 9 percent in each of the next two years.
