Metal industry strikers will have to work for years to recoup loss - Solidarity

Trade union Solidarity today pointed out that strikers in the metal and engineering industry will already have to work two to three years to recoup the loss they have suffered as a result of the strike. Moreover, for every day that the strike continues, this period is extended by a month to a month and a half for strikers on various job levels.

Marius Croucamp, head of the metal and engineering sector at Solidarity, says even after a period of six years the striking workers' potential additional earnings as a result of the strike will be minimal. "The strikers on the lowest salary levels, who will potentially get the highest increases, will cumulatively earn only about 3,4% more over the next six years than what they would have earned had the employers' original offer before the strike been accepted. For workers on the higher levels this increase is barely 1,3%.

"It is not advisable to go on strike for a meagre improvement of 1,3% or 3,4% over a period of six years. Apart from the direct loss of income for the workers during the strike, the indirect negative consequences such as layoffs or loss of bonuses could easily cancel out or outweigh such a small improvement," says Croucamp.

Below follows a fact sheet drawn up by the Solidarity Research Institute (SRI) that explains the practical impact the strike has on workers' earnings.

Fact sheet - striking metal workers' loss and recoupment period

In the metal and engineering industry, members of trade unions Numsa, Uasa, Saewa, Mewusa and Ceppwawu have been striking since 1 July 2014. Whenever there's a strike, the decision is always taken to forego benefits today in the expectation that the sacrifice will bring advantages in the future. In order to really make an informed decision about this, a concrete calculation should be made - which is seldom done by striking workers in South Africa.

As the wage offer of employers' organisation Seifsa, one of the employers' organisations in the metal and engineering industry, before the strike and the current offer are known, it can be determined how long it will take a striking worker to recover the current loss of income resulting from the strike.

Seifsa's offer before the strike and the offer currently on the table are as follows:

For purposes of the comparison it is assumed that the consumer price inflation rate (CPI) will be 6,5% in both 2015 and 2016.

Striker on wage rate A:

According to Seifsa, the current minimum monthly basic pay of a worker on wage rate A is about R11 000 per month. Had the initial offer of a 7% increase for July 2014 been accepted, it would have been R11 770 per month. If such a worker goes back to work on Monday, 21 July 2014, he will have lost R7 594 during the strike. If the increases of 8%, 7,5% and 7% are settled on, the worker will get about R110 per month more during the 2014 wage year than what he would have received if the initial offer had been accepted. In the 2015 wage year it will be R236 more and in the 2016 wage year R315 more. This worker will therefore only make up the loss of R7 594 by June 2017, three years from now. For each day that the strike continues, this period is extended by about a month and a half.

It could still be argued that this worker will be considerably better off from that date in 2017 than he would otherwise have been. Even if the period over which remuneration is compared is extended to June 2020, six years from now, the worker's total cumulative income from July 2014 to June 2020 will only be approximately 1,3% higher as a result of the strike, compared to what it would have been had the employer's original offer been accepted. The net difference is only R13 348 over the whole period, averaging less than R190 per month.

It is not a good idea to strike for a 1,3% improvement in wages over a six-year period. Apart from the direct loss of income for the worker during the strike, the indirect negative consequences could easily wipe out or surpass a small margin such as 1,3%.

Striker on wage rate H:

According to Seifsa, the current minimum monthly basic pay of a worker on wage rate H is about R6 000 per month. Had the initial offer of a 8% increase for July 2014 been accepted, it would have been R6 480 per month. If such a worker goes back to work on Monday, 21 July 2014, he will have lost R4 181 during the strike. If the increases of 10%, 9% and 9% are settled on, the worker will get about R120 per month more during the 2014 wage year than what he would have received if the initial offer had been accepted. In the 2015 wage year it will be R228 more and in the 2016 wage year R353 more. This worker will therefore only make up the loss of R4 181 by July 2016, about two years from now. For each day that the strike continues, this period is extended by about a month.

Even if the period over which remuneration is compared is extended to June 2020, six years from now, the worker's total cumulative income from July 2014 to June 2020 will only be approximately 3,4% higher as a result of the strike, compared to what it would have been had the employer's original offer been accepted. The net difference is only R18 943 over the whole period, averaging less than R270 per month.

As in the case of the worker on wage rate A, it is not a good idea to strike for a 3,4% improvement in wages over a six-year period.

Statement issued by Marius Croucamp, Head of industry: Solidarity, July 16 2014

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