Pay demands threaten jobs ’
ECONOMIST BLAMES UNIONS
ESKOM chief economist Mandla Maleka has warned that demands by unions for double-digit wage increases could result in more job losses.
Maleka said high wage hikes were directly responsible for the displacement of workers in the formal sector.
“Each time the unions demand double-digit increases, labour is going to be displaced,” he said.
He was responding to the quarterly labour force survey released yesterday by Stats SA which showed that just over a quarter of the South African population was unemployed between January and March.
His comments come at a time when unions across different economic sectors have begun to demand higher wage increases during what has been termed a strike season.
Maleka said the high wage demands would also result in companies opting to hire fewer personnel.
“On the labour front, there is no cohesion and there is violence to an extent that it does not augur well for employment,” Maleka said.
The report showed that unemployment rose to 25.2% in the first quarter from 24.9% between October and December. It also showed the number of the unemployed climbed 100 000 during the period.
“To have more than 25% of the population unemployed, that is a cocktail for disaster,” Maleka said, adding that – in developed countries – a rise in the unemployment rate to more than 10% would be enough to see the government, labour and business meeting urgently to find ways to curb the slide.
“We seem to tolerate the intolerable and underestimate the carnage that is caused by this high level of unemployment,” said Maleka.
He said government should find a solution to joblessness, as the public would judge it based on the number of people who were unemployed.
Cosatu president Sdumo Dlamini said though Maleka’s argument relating to doubledigit wage demands was true, it was one-sided.
“While the argument can be true it cannot apply to the public sector,” Dlamini said.
“This is because government and unions last year signed an agreement for a wage hike of 7% and this year they will receive an increase of 6.9%. However, when there is a vacancy in government the government generally does not fill it.”
Dlamini said that unemployment could be solved by an aggressive roll-out of infrastructure programmes.
“We have to all dirty our hands and move towards creating sustainable jobs,” he said.
He said the government should use pension funds to create companies in new industries.
“In the green economy, there are many opportunities and we could create new companies,” he said.