Public sector strike will come at a cost

South Africa is braced for a public sector strike, which, if all goes to plan, would be the largest in more than a decade.

Threats of the public sector strike have been eclipsed by the recent industrial action at Transnet, which a number of commentators have said will come at a high cost to the country’s fragile economy.

But, as was the case in 2010, a public sector strike stands to severely constrain services needed to keep the economy running — and, if unions have the mettle to keep the industrial action going on for long enough, the fallout would be enormous.

Strike looming

Last week, the Public Servants Association (PSA) said it was preparing to strike after the majority of its members rejected the government’s offer of a 3% salary increase. The union and government met on Monday to agree on picketing rules.

Civil servants are demanding a wage increase that is closer to the inflation rate, which stood at 7.6% in August. But the government has refused to budge after revising its offer higher from an initial 1.5% wage increase, citing the strain the growing wage bill has exerted on the country’s public purse.

The PSA said a strike is unavoidable “if government remains arrogant”. 

“It has been more than three years since public servants have received a salary increase whilst the costs of food, electricity, petrol and transport have escalated,” the union added. 

The PSA represents more than 235 000 public sector workers.

Cosatu-affiliated unions are also preparing to strike. The Police and Prisons Civil Rights Union, the Democratic Nursing Organisation of South Africa and the National Education, Health and Allied Workers’ Union (Nehawu) are waiting on a conciliation process, which will see them receiving a certificate to embark on industrial action.

Nehawu is Cosatu’s largest affiliate and represents workers across all government departments.

The 2010 strike

The last time a large public sector strike swept across the country was in 2010, which marked the worst season of industrial action up to that point. The strike, which involved 1.3 million civil servants, lasted 20 days.

According to an analysis by political economist JP Landman at the time, by September 2010 about 16.3-million man days had been lost through strike action. The public sector strike contributed 14.7-million man days to that number.

To put those figures into perspective, data from Andrew Levy Employment Publications shows that 1.6 million working days were lost through strike action in the first half of 2022.

At the time, economists estimated that the 2010 public servants strike cost South Africa R1-billion a day — about as much as some have said the industrial action at Transnet would dent the country’s economy each day.

The 2010 strike hit as the government was attempting to rein in public spending after the costly World Cup. It also marked the first face-off between ANC-aligned Cosatu unions and former president Jacob Zuma’s administration.

That strike also hit after a protracted period of elevated inflation, which soared to its highest level in years in the wake of the 2008 global financial crisis. The crisis severely impaired South Africa’s economic growth and employment in the decade that followed, causing both metrics to more-or-less flatline. 

When the PSA embarked on the 2010 strike, after rejecting the government’s offer of a 6.5% salary increase, it noted in a statement that “the real inflation on expenses such as electricity, food, fuel, clothing and healthcare gulps up more than 90% of our members’ disposable income”.

The cost of living

The 2022 strike season comes as workers grapple with the cost-of-living crisis, with elevated inflation having emerged as a stubborn feature of the global economy’s recovery from the pandemic-induced slump. Inflation accelerated to 7.8% in July, marking the fastest yearly increase since 2009.

Labour economist Andrew Levy said public sector workers today are probably facing similarly tough economic conditions to those experienced by the 2010 strikers.

On average, workers in the public sector are well paid compared with some other sectors, he added. Workers who are being paid at the median wage rate and above may not want to embark on protracted strike action, because they have debt to pay off.

“But if you look at the lowest-paid in the public sector … it is clear that some are feeling the pinch more than others, which is why it would be sensible for the unions to put in a claim that starts off with dealing with the lowest paid and eradicating wage gaps,” Levy said.

The dynamic between lower and higher paid workers has played out in the Transnet wage negotiations. 

Labour initially demanded an increase of between 12% and 13.5%, citing harsh economic conditions. On Monday, the United Transport & Allied Trade Union accepted a 6% increase, leaving the South African Transport and Allied Workers Union alone on the picket line. The latter union said it would prevail, because the lower paid workers it represents aren’t willing to take a smaller increase.

The cost of striking

Levy noted that, in the event of a public sector strike, a union such as Nehawu might be able to stick it out for longer than smaller unions. 

He said public sector unions have managed to amass considerable power since 2010. But union membership has been on the decline generally. 

“All around the world, the public sector is the last bastion of the trade union movement. And of course the public sector has a different relationship with the employer. On the one hand they are employees and, on the other, they happen to be voters as well,” he said. “That is the source of their political power to some extent.”

A public sector strike will have a huge knock on effect for the economy, Levy said. There will be backlogs at the deeds registry, there will be building delays, passports won’t be issued.

What would really tip the balance, Levy said, would be if pensions and social grants could not be paid out. “If that were to happen, the fallout would be massive. So yes, it would be wrong to say that there will be no impact.”

But Sanisha Packirisamy, an economist at Momentum Investments, said a protracted public sector strike is unlikely because workers tend to lose more than they gain through the industrial action.

She said the government will probably continue to take a hard line against further inflating the public sector wage bill and having to cut down the workforce and further compromise services. 

Packirisamy added that the industrial action at Transnet, and at Eskom earlier in the year, might set the scene for a public sector strike.

Speaking to the Mail & Guardian earlier this week, the PSA’s Reuben Maleka underlined that a strike is always labour’s last resort — especially considering the effect industrial action will have on public services.

“Unfortunately, a strike is the last resort. In the normal course of negotiations, if you can’t find one another, the ultimate aim is that the employer feels the impact. And it is unfortunate that the impact will be on the economy,” he said.

“That is the purpose of a strike. Obviously it has to have an impact in terms of the general economic outlook of the country.”

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