Inside Labour: It’s crunch time for unions

We are heading into a rough year ­economically; that much seems to be agreed on by economists and commentators across the board.

So when unions start, later in the year, to demand double-digit pay rises, do not be surprised: they will be justified. As will farm workers in protesting about their 95c-an-hour ­increase, announced this week.

And should the state of the nation address next week call for more belt-tightening, the unions will be justified in condemning austerity measures and calling for the “fat cats” to pay up.

However, given the degree of infighting and ­apparent fragmentation within a number of ­Cosatu unions, along with bickering about rival federations, the labour movement will probably be weaker this year than at any time in the recent past.

But this will not halt accusations that it is “greedy” unions that are at least partly to blame for the economic crisis the country faces. Yet such accusations fly in the face of reality and usually rely on official statistics, without looking beneath the surface of the figures.

This shallow analysis means it is generally ­accepted that the cost of living in December ­increased by 5.9% and that wage rises should be pegged to this figure, or to whatever it is when pay is negotiated.

However, the inflation rate (consumer price ­index) is calculated on the range of purchases made by households that, on average, spend R12 500 a month. This is roughly three times more than the pay of nearly half of employed South Africans.

A more accurate calculation of inflation for low-paid workers would be to assess the increase in the cost of essentials: food, transport, clothing, shelter – let alone such items as school fees and medical provision.

In a country with a probably realistic unemployment rate of about 40%, the number of dependants every worker supports also tends to be high. And all share the common burden of the cost of living.

Such costs – especially at the level of basic ­foodstuff – have, in recent years, generally exceeded wage rises, meaning most workers have suffered reductions in the buying power of their pay.

Over the past year, for example, a basic basket of groceries, measured for several years by this column, has risen by more than 15%.

However, staples for most poor households, such as cooking oil, mealiemeal and samp, have together recorded a 40% increase.

The cost of even that dietetically awful stand-by of the poor – sugar and bread – has gone up by more than 10%.

And this is before the full effects of the collapse in the exchange rate value of the rand and the drought have fed through to the rest of the ­economy. For those on minimum wages or fixed incomes, let alone the army of the unemployed, this is a frightening prospect.

And it is trade unions that have traditionally ­provided a defence for this vulnerable sector of society. So the need for a united, independent and democratic labour movement with a clear focus on a new economic model has perhaps never been more urgent.

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