AS TRADE UNIONS affiliated to Cosatu dig in their heels for a messy battle with Stateowned utilities Transnet and Eskom over wage increases, Finance Minister Pravin Gordhan has good reason to fear the worst. Public sector unions have demanded between 15% and 20% pay hikes, setting labour on a collision course with Government as Gordhan tries to tighten State spending.
Unions have countered that double-digit increases are reasonable, given the vast gap between the lowest and highest paid. However, analysts have weighed into labour, arguing their demands aren’t consistent with a fall in inflation to 5,1%. “This isn’t acceptable. It’s a tough economic climate and public sector workers face the same reality as the private sector. At some point Government needs to get tough and dig in its heels,” says Econometrix Treasury Management MD George Glynos.
Trouble is, it already has and a stand-off may be closer to the bone than expected.