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South Africa Offers to Increase Wages by 7.5% to End Public Workers Strike
South Africa’s government increased its pay offer to public workers to end a 14-day strike that has shut thousands of schools and disrupted hospitals and courts.
The state proposed raising wages by 7.5 percent and lifting housing allowances to 800 rand ($109) during talks with unions last night, the government said in an e-mailed statement today.
“In all probability, the strike will be called off,” said Chris Kloppers, chairman of the Independent Labor Caucus, representing 10 unions with 460,000 members. “The general feeling is that the mandate of the employer has been exhausted and they can’t do anything more,” he said by phone from Port Elizabeth today.
President Jacob Zuma yesterday ordered Public Service and Administration Minister Richard Baloyi to resume talks with unions to end the labor action that threatened to widen this week to the country’s gold and platinum mines. Nurses, teachers and other state workers went on strike on Aug. 18 after the government rejected their demands to raise wages by 8.6 percent and housing allowances to 1,000 rand.
The rand fell to its lowest level in more than a month, declining as much as 1.3 percent to 7.4371 per dollar. It traded at 7.3774 per dollar at 4:08 p.m. in Johannesburg.
Public-sector unions, representing 1.3 million workers, will consult with members today and give their decision on the improved offer tomorrow, Kloppers said.
Budget Pressure
The government said its previous offer of a 7 percent pay raise and a 700 rand housing allowance would add 5 billion rand to this year’s budget. The cost of the revised offer is still being calculated, according to the National Treasury. Salaries account for 32 percent of the state’s 850 billion rand expenditure.
“Governments are always faced with this situation where you have unlimited wants and limited resources,” Deputy Finance Minister Nhlanhla Nene told reporters in Cape Town today. “We did indicate that we had already reached the ceiling but government has a responsibility of finding money through its available resources. This impasse needs to be resolved.”
Violent Clashes
The wage increase is double the current inflation rate of 3.7 percent and exceeds the central bank’s target band of 3 percent to 6 percent.
“This is indeed an improved offer, but is not exactly what our bottom line was,” Fikile Majola, general secretary of the National Education, Health and Allied Workers Union, said by phone today. “We got a clear sense from the government that there won’t be further movement. We have to take this to our members.”
The strike has been marred by violent clashes, with police using rubber bullets and water cannons to disperse protesters who sought to block patients and doctors from entering state hospitals. Soldiers have been deployed to fill in for some striking health-care workers.
“The strike is not in the interests of both the employers and the workers,” Labor Minister Membathisi Mdladlana told Parliament in Cape Town today. “Workers know they will lose wages. Government knows that the strike does affect the economy and the rank and file people of this country.”
The unions wanted the government to raise its offer to at least 8 percent, Zwelinzima Vavi, the general secretary of the Congress of South African Trade Unions, said in an interview on Johannesburg’s SAFM radio.
“Workers must now ask serious questions on what are the chances of getting a better offer in the coming weeks and what are the implications of the strike,” he said.
To contact the reporters on this story: Nasreen Seria in Johannesburg at nseria@bloomberg.net; Mike Cohen in Cape Town at mcohen21@bloomberg.net.
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