Unions likely to demand hefty raises, says analyst

2009-03-10 00:00

“COMPROMISE” should be the watchword during wage negotiations in the private sector this year, as unions are expected to push for hefty wage increases on the back of last year’s high consumer inflation .

This is the view of a professor of labour economics, Andrew Levy, who is also a labour law consultant, analyst and trainer.

The economy has already shed tens of thousands of jobs, particularly in manufacturing and mining.

Adcorp Holdings this week released the results of its Staffing Industry Employment Index, which shows an 18,3% year-on-year decline in employment levels in the key industrial sectors of mining, manufacturing, construction, trade and financial, real estate and business services.

Although consumer inflation has softened in recent months, Levy said workers will seek compensation for high inflation last year. “There will be strong tension this year. Compromise is the watchword,” he warned.

On a more positive note, he believes that the economy may have experienced the worst of the job cuts.

While certain sectors that are heavily dependent on global demand will “get hammered” this year, Levy said, he expects the economy to register positive overall growth.

The downturn, he said, “won’t be as long as many people think. There should be positive growth, inflation will come down and the cost of money is rapidly declining,”

Levy said certain structural changes in the labour market have benefited employees. “Labour broking has actually made the labour market more flexible. The potential for job losses has been regulated by people working fewer hours.” He urged companies to consider this option before resorting to lay-offs.

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