The Running Commentary


Strike Strike Strike who wins?

I have no objections to strike action. In fact I think that this is an integral part of the culture that we live and strive in. I have posted about the merits and demerits of these actions in the past, and thought, given the current situation that this may be worthy of reviewing again.

As we all know the “workers” withhold their labour (without pay in most instances) in an attempt to extract the maximum increase percentage. The employer knows that they are going to have to contend with this so make contingencies. Usually the contingencies go some way to ensuring that the customers don’t feel the full impact.  You then get news reports that offer both sides of the story, the employer typically saying “only minor absenteeism has been reported” and the converse from the strikers “many of our members have not reported for work”.

The current situation that we find ourselves in is that every one of the striking unions is demanding dramatically higher than inflation wage settlements.  This is a situation that has repeated itself time and again over the past years.

This post though is dedicated to the many millions of people who are unable to strike, unable because their businesses do not allow organisation around union lines. Additionally they live with the constant fear that there jobs are on the line. These people ironically are the one’s that are typically most affected by above inflationary wage settlements.

When any agreement is reached that is above the inflation rate, the result effectively comes straight off the bottom line. In the case of government this is going to be measured in service delivery terms, although it will never officially be acknowledged.  They may also have to raise the tax burden on the economy in order to fund this.

The effect on South Africa as a whole is that employers raise their prices and further drive up the inflationary pressure. This in turns causes those businesses on the edge to tilt and close. This further drives unemployment. Government cannot expect to create jobs when jobs are being lost. You are a fool if you believe that they can.

My view is that government should set an example. No increase above inflation should ever be given. Merit increases for individuals who perform above par should be the only exception. The argument that this will forever keep certain people in poverty is nonsense. When you start your employment anywhere you need to negotiate your starting salary. This salary, for the time you are in this position, should never be increased by more than inflation, because you are still doing the job of work you were employed to do.

Advancement, through your life stage comes from progress. Progress comes from you performing your tasks above expectation, which in turn gives you the opportunity to rise through the ranks. This is how you should progress in business and indeed government.

So in short if you think that striking will improve you life standards your wrong, all that this does is revise the base level. So it is my contention that a wage settlement above inflation in fact is more detrimental to the country as a whole.

Maybe you disagree?

ANCbusinessEconomyelectionsIncreaseInflationlabourstrike actionunionsWage

Mike • September 2, 2010

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