/ 11 July 2011

SA unions have a ‘death wish’, says economist

As employees in the chemicals sector joined metalworkers in their strike on Monday, there were fears that petrol stations could run out of fuel.

Colen Garrow, economist at international investment group Brait, told the Mail & Guardian on Monday that while there may be widespread shortages, it depended on how long the strike lasted.

The countrywide strike in the engineering sector entered its second week on Sunday.

“At the very most at this stage I would predict bottlenecks at petrol stations as motorists rush to fill their tanks,” Garrow said.

The effect of the strike on the South African economy was already taking hold, with third-quarter GDP growth predictions being revised downwards.

Chief economist at Investment Solutions Chris Hart told the M&G that while the bulk of the strain caused by the recession had been weathered by the South African economy, the current industrial action would have a negative effect.

“The global economy is showing signs of slowing and the threats to our continued recovery are being exacerbated by the strike action. We have done all we can in terms of lowering interest rates and widening the budget deficit and this could drag us back down,” Hart said.

This was echoed by economist Richard Downing, who believed organised labour must realise that increased wages will lead to further unemployment, saying it was as if the unions had a “death wish”.

“The economy is not that resilient and business just can’t afford these increases. Unions must know what is affordable and grapple with the facts. If these increases go through unemployment will increase. It’s a simple equation,” said Downing.

The Chemical, Energy, Paper, Printing, Wood, and Allied Workers’ Union (Ceppwawu) and General Industries Workers’ Union of South Africa (Giwusa) last week indicated that their members would embark on the strike from Monday.

The unions were joining the National Union of Metalworkers of South Africa (Numsa), the Metal and Electrical Workers’ Union (Mewusa), United Association of South Africa (Uasa), Solidarity and the South African Equity Workers’ Association (Saewa).