Private firms strike out over salaries

Apart from being centred on wage increases, all the major strikes this season — from construction to the automotive sector and from gold mines to the motor retail industry — have another thing in common: they are all taking place in the private sector.

A look at average monthly earnings makes some sense of this. Between 2000 and 2010 workers in the public sector earned a significantly higher average amount than those in the private sector, with the wage differential topping 40%.

There have been a few exceptions where parastatal employees have downed tools.

For example, there was the low-grade, 600-strong technical strike at South African Airways (after dragging on for two weeks, it finally ended in an agreement between the parastatal and the South African Transport and Allied Workers Union on September 10); the unsanctioned strike by Johannesburg City Power employees over new shift hours — which was snuffed out after parts of the city were without power for a few days last week; and short-term on-off strikes at various Eskom plants in July.

But these events have been minor compared with the heavyweight strikes this season — the roughly 90 000 construction workers from the National Union of Metalworkers South Africa (Numsa) who stopped working on August 26; the 30 000 labourers in the automotive industry who downed tools for more than three weeks before an agreement was signed on September 9 and the unions in the gold mines that are playing tag with work stoppages.

After abandoning their posts on September 3, the National Union of Mineworkers started trickling back to work a week later as the union agreed to a basic wage increase of between 7.5% and 8% for its members.

The United Association of South Africa and Solidarity also agreed to the increases and thereby avoided strike action, but the Association of Mineworkers and Construction Union said its members had unanimously rejected the offer and announced its intention to take to the streets if its demands of a R12 500 minimum salary are not met.

At the same time, Numsa’s 70 000 members in the motor retail industry — including panel beaters, car dealers, components manufacturers and petrol attendants — were instructed to stay home from work from September 9, following a breakdown in wage negotiations between the union and the Fuel Retailer’s Association and the Retail Motor Industry Organisation.

Public sector: deeper pockets
Research compiled by the South African Institute of Race Relations — based on statistics provided by the Reserve Bank and labour broking company Adcorp Holdings — shows that between 2000 and 2010, the average wages paid to workers in the non-agricultural sectors of the country were consistently and significantly higher in the public sector than those in the private sector.

In 2000 the average wage in the private sector was R3 400. By comparison, the average wage in the public sector was R3 820 — more than 12% higher.

By 2001 the difference between average salaries in the two sectors had increased to almost 18%. And the differential continued to climb.

By 2003 the public sector was being paid 24% more than the private sector. By 2004 it was being paid 27% more.

But it was 2005 that saw the massive leap: the average private sector salary was R4 015 that year, and the comparative public sector salary was R5 695, meaning government employees earned almost 49% more on average.

For the four years after that the differential fluctuated around 30%.In 2010, it broke the 40% mark again.

Average wage doubles
The average wage had more than doubled over the past decade for the private sector, moving from R3 400 to R6 220.

But it had increased even more significantly for the public sector, moving from R3 820 to R8 940.

The result? The differential between public sector and private sector wages quadrupled between 2000 and 2010, from 12.3% to 43.6%.

“It is safe to say that the trend where public sector employees are paid more on average than the private sector employees has continued over the past three years,” said Georgina Alexander, an assets and incomes researcher at the South African Institute of Race Relations.

“In the 2012-2013 financial year, 33.5% of total government spending was on personnel. The public sector wage bill in 2011 came to 16% of South Africa’s gross domestic product,” she said.

Research by the Reserve Bank comparing determinants of public and private-sector wages revealed similar figures.

When comparing median (rather than average) monthly wages across the two sectors in 2005, the salary for the public sector “was substantially higher at R5 000 than it was for private sector workers who earned around R2 000 a month”, noted researcher Adele Bosch.

The Reserve Bank has done no research on the matter since 2006, but Bosch said that she will be delving into the topic again shortly.

Cosatu brushes off ‘impending collapse’ omen
The last time the public sector saw large-scale strikes was in 2010.

The lost production was colossal: 20.7-million working days were lost to protest action.

For every 1 000 employees, 208 working days were lost to strikes that year, said the department of labour’s industrial action report.

To put it in perspective, that figure declined by 86% the following year. The lack of large-scale mass public protest action since then could arguably be due not to higher comparative wages, but to multiyear wage agreements struck in that year.

Loane Sharp, labour economist for Adcorp, said the sector will see “South Africa’s next labour relations crisis” and that the civil service “is on the brink of collapse”.

“A large part of the impending collapse must be laid at the door of the public sector union, Cosatu, which has refused to allow public servants’ wage increases to be pegged to productivity levels,” said Sharp.

Performance agreements
The union has also “refused to allow its members to enter into performance agreements with their employer, the state”, he said.

Due to issues such as nepotism and nonpayment of salaries, “civil servants have many grievances”.

The recent attempt by Finance Minister Pravin Gordhan to rein in public spending was one of several existing factors that could combine to “spark a wave of strikes and violence throughout the public sector”, said Sharp.

However, Cosatu spokesperson Patrick Craven said he was not aware of a dispute that could lead to the start of a strike in the short term.

“I suspect there will always be outstanding issues, but the majority of them are settled outside of strikes,” he said, adding that the general public service sector bargaining council is there to deal with issues “as and when they arise.”

When questioned whether unions in the public sector were contemplating strike action, the bargaining council’s Sharlaine Oodit said she was unable to comment as the council “had not put out a formal communication” on the matter.

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Thalia Holmes
Thalia Holmes

Thalia is a freelance business reporter for the Mail & Guardian. She grew up in Swaziland and lived in the US before returning to South Africa.

She got a cum laude degree in marketing and followed it with another in English literature and psychology before further confusing things by becoming a black economic empowerment (B-BBEE) consultant.

After spending five years hearing the surprised exclamation, "But you're white!", she decided to pursue her latent passion for journalism, and joined the M&G in 2012. 

The next year, she won the Brandhouse Journalist of the Year Award, the Brandhouse Best Online Award and was chosen as one of five finalists from Africa for the German Media Development Award. In 2014, she and a colleague won the Standard Bank Sivukile Multimedia Award. 

She now writes and edits for various publications, but her heart still belongs to the M&G.     

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