South African State Workers Suspend 20-Day Strike

Sept. 6 (Bloomberg) -- South African state workers suspended a strike that has shut thousands of schools and interrupted services at hospitals and courts since Aug. 18, as they consider an improved wage offer from the government.

The government proposed on Aug. 31 to increase wages by 7.5 percent and raise monthly housing allowances to 800 rand ($110) from 500 rand, after President Jacob Zuma ordered negotiations to resume. Unions representing about 1.3 million state workers want a pay increase of 8.6 percent and 1,000 rand in allowances. South Africa’s inflation rate is 3.7 percent.

“Labor has decided to suspend the strike,” Thobile Ntoli, president of the South African Democratic Teachers’ Union, told reporters in Pretoria today. “This does not mean that we have accepted the state offer.”

The labor action has strained relations between Zuma’s administration and the Congress of South African Trade Unions, the largest labor grouping and a member of the country’s ruling alliance. Cosatu, which says its affiliate unions represent more than 2 million workers, had threatened to stage a nationwide sympathy strike and shut mines and factories unless the state workers’ pay demands were met.

“The return to work is a welcome development for the public service and the country in general,” Public Service Minister Richard Baloyi said in a statement. “We urge those who are returning to the workplace to ensure that we deliver the services that are so sorely needed by all communities across our country.”

Immediate Return

The ruling African National Congress welcomed the decision. “We believe this is a step in the right direction in ensuring stability and normality in our public sector,” the party said in an e-mailed statement.

The strike was marred by clashes, with police using rubber bullets and water cannons to disperse protesters who sought to block patients and doctors from entering state hospitals. Soldiers were deployed to fill in for some striking health-care workers.

“The suspension takes place immediately and we want workers to return to work immediately,” said Chris Klopper, chairman of the Independent Labour Caucus, which groups 10 unions representing about 460,000 workers.

A wage accord would force the government to raise spending even as it attempts to narrow the budget deficit to 5 percent of gross domestic product in the year through March 2012 from 6.2 percent this fiscal year. The budget released in February provided for state workers to receive a pay increase of 5.2 percent.

Bad Example

“We’ve managed to move the state from 5 percent to 7.5 percent,” Ntola said. “Given that inflation is 3.7 percent, it’s a quantum leap. We are going to take whatever we have back to our members. They will tell us whether they accept the offer or not.”

The unions said in a statement they would canvass the views of their members within 21 days.

Government employees last went on strike in 2007, when schools, hospitals and immigration offices were disrupted for 29 days, the longest-ever walkout by state workers.

The government is setting a bad example by agreeing to such high wage increases, said Mike Schussler, chief economist at Economists.co.za., a Johannesburg-based advisory service.

“There is definitely a knock-on effect,” he said. “Less jobs are going to be created in the economy.”

To contact the reporters on this story: Mike Cohen in Cape Town at mcohen21@bloomberg.net; Nasreen Seria in Johannesburg at nseria@bloomberg.net.

To contact the editor responsible for this story: Peter Hirschberg at phirschberg@bloomberg.net.