Union wants 20% pay rise
DFTSE 100 DAX DOW BRENT CRUDE EMANDS by the National Union of Metalworkers of SA (Numsa) for a 20% wage increase come negotiation time is out of line and could lead to further job losses, economists have warned.
With the economy on its knees and growth expected to be less than 1%, economists say even an inflation-aligned wage increase demand could put jobs at risk.
Following a decision at Numsa’s national bargaining conference at the weekend, it will enter wage negotiations with the double-digit wage increase demand and one for single-year agreements.
The union is also calling for 80-20 splits in medical aid scheme payments in favour of employees‚ that employers in-source all services‚ a ban on labour broking be introduced‚ and that a R5 000 housing allowance be provided.
The union – the largest in the country with a membership in excess of 300 000 – will be bargaining in the automotive sector when the current three-year agreement comes to an end in August and in the metals and engineering sector next year. Ford SA spokeswoman Alisea Chetty said: “We have received a copy of the outcomes from the Numsa [conference] meetings and we will negotiate in good faith on an agreement that is fair and mutually beneficial.”
Volkswagen SA and General Motors SA declined to comment, referring questions to their bargaining representatives, who would not “negotiate through the media”.
Economist Dawie Roodt said: “Of course, workers are entitled to an increase, but at a time when the economy is at such a fragile state such demands are too much.
“We are facing no [economic] growth this year and the growth needed just to maintain jobs is at 3%. A 20% [wage] increase in this context is out of line.
“A more realistic bargaining tool is an increase along inflation lines, but even that could put jobs at risk,” Roodt said
Econometrix’s Dr Azar Jammine said such an increase could depress economic growth even further as employers could simply not afford these increases.
“While some businesses may agree to some of these [demands], it could see them cut into their labour force,” Jammine said.
Further warnings on job losses, particularly in mining and manufacturing‚ were issued at the release of a report by trade union the United Association of SA (Uasa).
The warning came from economist Mike Schussler, who said job losses would pose a challenge requiring more investment in tourism and other alternative sectors to support job creation.
Another union‚ Solidarity‚ estimated yesterday that 58 549 workers could lose their jobs this year‚ with more than 29 000 at risk in mining and 8 000 in the metal and engineering industry. – Additional reporting by Ntsakisi Maswanganyi and Reuters
