President Cyril Ramaphosa’s call for South Africans to work together is not reverberating with the trade unions, which say they should not be made to pay for the rampant corruption of the recent past.
The tough economic climate, with both the public and private sectors pleading poverty, has not dampened unions’ above-inflation wage demands.
A three-year wage settlement of increases between 6% and 7%, including housing and other service benefits, was agreed on for public sector workers, although Finance Minister Nhlanhla Nene has said it exceeded the money made available for the compensation of employees in the 2018 budget and placed the government’s expenditure ceiling in jeopardy.
This week, power blackouts, caused by strikes, resumed as the financially strapped state-owned power utility Eskom and unions struggle to find common ground on the issue of bonuses, which Eskom says it cannot afford. This is the second time the country’s power supply has been affected by the wage negotiations, which have gone on for two months.
Wage talks in the gold mining sector resumed on Wednesday after unions rejected what they said was a low starting offer by the Minerals Council of South Africa. The National Union of Mineworkers (NUM) demanded entry-level wage increases of between 15% and 18.5% for surface, underground and skilled workers.
The council’s opening offer ranged from 5.5% to 6.5% for underground employees and 3% to 4.5% for miners and artisans and officials.
The council has said that 50% of the gold mines are unprofitable or just making it. South Africa has some of the oldest gold mining shafts in the world, which are deep, labour- intensive and expensive to mine.
Labour analyst Mamokgethi Molopyane said the state of the economy and the difficulties in the mining sector meant the above-inflation wage increases the unions were asking for were not affordable.
Economic growth has stagnated and gross domestic product (GDP) fell by 2.2% in the first quarter, putting the country on the brink of a technical recession. Eskom continues to face unrelenting financial constraints, made clear when the utility last week announced a R4.6-billion loss in its electricity-generating business.
Meanwhile, South Africans have been hit by the effects of record high fuel prices — R16.03 a litre for 95 octane unleaded petrol inland — and the 15% value-added tax (VAT)rate, which is meant in part to plug the shortfall in the government’s finances.
Regarding whether the unions should make sacrifices and adjust their demands to take in the economic realities and heed the spirit of Ramaphosa’s call, Molopyane said: “Sacrifices, like everything else, have to be contextualised and are relative to the person on the other side.”
The NUM’s Livhuwani Mammburu said the union was not willing to make sacrifices for fruitless expenditure and corruption at Eskom.
“Workers were not the ones who were involved in corruption. Workers were not the ones who spent R19-billion on fruitless expenditure,” Mammburu said.
Eskom has put forward two three-year wage options to the unions, the first being a 7% wage increases for three years, with a housing allowance, or 7.5% in 2018 and 7% in 2019 and 2020, with no housing allowance.
The unions have not responded to this offer because they are still locked in a dispute over the performance bonus, which they say should be paid to workers who have exceeded the minimum target required for a bonus.
“It’s an issue of principle that workers should not be expected to pay the cost of crimes committed by other people in an organisation like Eskom, which has led to the financial crisis it now faces,” said Patrick Craven, the spokesperson for the South African Federation of Trade Unions (Saftu).
Craven said Saftu believed the “new dawn” had failed to materialise and, in fact, had “become a nightmare”.
“There’s tremendous anger among workers and that’s something the media doesn’t appreciate. They look at the sort of employers’ arguments, which is that workers have got to join everyone in paying the price.
“All the problems of unemployment and inequality are all getting worse since Ramaphosa took over. This is because he has adopted an economic policy that is unsustainable,” Craven said.
Tahir Maepa, deputy general manager of the Public Servants Association, which rejected the current wage agreement, said it did not offer workers a meaningful raise in the face of high tax and VAT increases. It was as though workers were being “punished twice”.
“On top of that, our money and pension money is being taken to bail out this corruption in the SOEs [state-owned enterprises] and yet we are told we don’t deserve to get a living wage,” Maepa said.
Tebogo Tshwane is an Adamela Trust business reporter at the Mail & Giuardian