SA strike season has 'marginal' impact

The wave of strikes that recently hit South Africa ground to a halt its vital gold industry and the national airline, as unions struggled to negotiate wage hikes on the basis of the lowest inflation rate in years.

The serial protest also affected retail giant Pick ‘n Pay, the public transport sector and civic services, with municipal refuse collectors trashing streets with garbage.

But the economic impact of the protests is marginal compared with the past, analysts say.

They stress that while the strikes have been very emotional and occasionally violent, they were nowhere near those in the late 1980s and early 1990s either in magnitude or in terms of clashes.

Analyst Lulu Krugel said: “Workers are traditionally used to a certain annual hike and expectations are high. So, this year, they were dealing with a 3,5% inflation rate, unlike double-digit figures earlier.

“Some companies offered even less than the official figure and this led to the strikes,” she said.

Strikes had been devastating earlier in the twilight years of apartheid, which ended in 1994, and were marked by high levels of violence. They were also essentially political in nature.

“In the late 1980s and early 1990s, we lost about nine million man days, with 3,1-million man days lost in 1999 alone,” labour analyst Jackie Kelly said.
“We are nowhere near even half that figure now.”

The worst strike in South Africa’s gold industry in 18 years ended after five days late on Thursday when the miners accepted a wage hike offer of between 6% and 7% from four leading gold firms.

The Chamber of Mines estimated that the strike cost about R130-million a day.

But independent economist Mike Schussler said the effect of the gold strike was minimal compared with the past when the precious metal was South Africa’s main money spinner.

The world’s second-largest gold producer, AngloGold Ashanti, meanwhile said it lost more than a tonne of gold but hailed the speedy end of the protest.

AngloGold CEO Bobby Godsell said: “It is pleasing that the strike was resolved reasonably quickly ... It is an indication of how far we have come since the last wage strike in 1987, which lasted for three weeks and involved significant violence.”

He added: “The settlement, involving the lowest percentage increases ever, was also an important step in establishing a norm of lower single-digit increases in an environment of low inflation.”

South African Airways also suffered its worst strike in its 71-year history and the week-long stoppage cost Africa’s largest airline R200-million per day initially and climbed to R250-million, according to analysts.

Patrick Craven, from the Congress of South African Trade Unions, said there is growing discontent over the huge chasm between the salaries of top management and blue-collar workers.

“There is one common thread in these disputes: there is a huge gap between people at the top and people at the bottom, and several of the companies hit by the strikes just issued results with huge profits and awarded big increases for the top directors but none for the others.

“The inequalities here are [among] the highest in the world and with the least justification.”—Sapa-AFP