TAKE2: Why strikes are good for SA's economy

While Trevor Manuel may think South African businesses are cowards by not standing up to the unions, I suspect CEOs are rubbing their hands in glee—because strikes are an ingenious way to deal with overcapacity.

Right now British Airways could do with a strike. It has asked employees to either work for free for a month or take a month of unpaid leave (I know which option I would choose).
In South Africa that sort of request would be met with, surprise, surprise, a strike—which would effectively be the same thing.

A series of strikes during a recession is, in fact, such a brilliant concept, it has possibly been conjured up by Nedlac itself. Maybe the negotiations at Nedlac have actually born out a recession strategy which creates a win-win scenario for unions and businesses alike.

With manufacturing figures collapsing, there must be a lot of unwanted working hours to pay for. But companies don’t want to retrench because it is expensive and they will just have to re-hire the workers when the economy recovers.

Strikes, which operate on a no work, no pay basis, reduce the salary bill for companies while the unions get to look like they are flexing some muscle and remain the working person’s hero.

Take Numsa, for example, who are threatening to strike if Mboweni does not cut the repo rate dramatically.

Numsa knows this is not going to happen—the day our Reserve Bank policy is dictated to by striking unions is the day we can all kiss our pension funds and the economy goodbye, as South Africa’s sovereign rating plummets and foreign investors (and local ones) draw their money out of the country like it’s a ponzi scheme.

But if they do go ahead and strike, they will look like the hero of the working people, and SA Inc won’t have to ask their workers to take unpaid holidays.

Now if only we could find a way to get overpaid CEOs to strike!

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