8 June 2018
The Federation of Unions of South Africa (FEDUSA) fully supports the Public Servants Association (PSA)’s plan – its 230 000 strong affiliate in the public service to embark on a nationwide strike – dubbed the Day of Rage – on Monday, 11 June 2018, in support of its wage demands at the Public Service Coordinating Bargaining Council (PSCBC) said Dennis George FEDUSA General Secretary.
The PSA has tabled a wage increase demand of 12% across the board, compared to the government’s offer of 7% increases for lower level workers; 6.5% for mid-level employees and 6% for senior managers for the 2018/2019 financial years; and staggered scale for the final period of the three-year wage deal. Housing allowances in cases where both spouses are civil servants will now be paid separately from September this year for lower-level employees and in September 2019 for middle managers.
Government as the employer is responsible for the weak state of the economy, by allowing senior officials in authority to engage in looting of state coffers, enhance state capture, corruption and fraud to total degenerate the creditability of State Owned Companies (SOCs). Eskom, SAA, Denel and other SOC’s all constantly need bailouts. The creditability of SARS, who is responsible for revenue collection, was also battered and it was estimated that more than R100 billion was lost in the process. In spite of all the evidence nobody was prosecuted. Therefore, the Day of Rage is justified.
To make matters worse, government increased the general fuel levy by 22 cent per litre, the Road Accident Fund (RAF) levy, by 30 cent per litre in February 2018 and the VAT from 14 to 16%. With the fuel prices increased in April, May and June 2018, how does government think public servants and South Africans must carry the burden for the way the authorities have mismanaged the economy through the creation of political uncertainty. FEDUSA does not find it abnormal that the economy contracted as reported by Statistics South Africa that the real gross domestic product (GDP) decreased by 2,2% in the first quarter of 2018, following an increase of 3,1% in the fourth quarter of 2017.
Similarly, the dismal state of affairs of our health care system, the main contributing factor to the system collapse remains the deep levels of corruption and maladministration in the DoH especially at provincial level. Why then should public servants be robbed of a deserving increase when resources are looted.
The largest negative contributors to growth in GDP in the first quarter were the agriculture, forestry and fishing industry that decreased by 24,2%, the mining and quarrying industry decreased by 9,9% and the manufacturing industry decreased by 6,4%. Exports also decreased in the same period.
The New Growth Path (NGP) economic strategy that government released a few years ago, agrees that the share of wages in the national income of South Africa declined from 50% in 1994 to just over 45% in 2009, while the share of profits increased from 40% to 45%.
The theories of John Maynard Keynes supports the demands of the public servants that in macroeconomics higher wage share can have expansionary effects. For most households, wages are the main source of income. Therefore, higher wages thus directly feed into higher consumption expenditures. Moreover, the poor tend to spend a higher share of their income than the rich.
Higher inequality can thus be bad for demand and growth. This argument that highlights wages as a source of demand is at odds with standard (or mainstream) economics, which regards wages primarily as a cost factor: higher wages is bad news for firms and they are likely to invest less as a result. However, already in the 1930s, Keynes had pointed out a fallacy of composition in this argument: While each firm might want to pay their own workers lower wages, it is not clear whether they want wages in general to fall, because that may negatively affect the demand for their output. In short, wages are both a source of demand and a cost factor concludes George.
FEDUSA is the largest politically non-aligned trade union federation in South Africa and represents a diverse membership from a variety of sectors in industry. See www.fedusa.org.za for more information.
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