Public sector wage agreement isn’t all good news

27 July 2021

Some are hailing the wage dispute between the Government and the public sector trade unions as a triumph. Cosatu has patted its affiliates on the back for accepting the new deal, no doubt with one eye on it getting a slice of what little will end up in workers’ pockets after the usual deductions.

The award is also said to have the approval of the Treasury, but probably given through clenched teeth seeing as it endorsed the original offer which sent union negotiators scaling new heights of outrage.

This is praise for what amounts to extortion of the public purse.

Why? The award fails to consider properly the priorities that face the country: a sluggish and almost moribund economy; a horrendous unemployment rate; the appalling state of the majority of local authority infrastructure; the poverty of most of the population; the R20 billion damage wrought by the looting wave to Kwa-Zulu natal and Gauteng. And that list omits the state of the railways and the state-owned enterprises.

The original 1% wage offer made sense. This settlement does not. Why should government employees whose performance is a hindrance rather than a help to wealth creation and, in the case of those in public policing and state education, a general disgrace, be awarded more money?

Public servants have enjoyed a 40% increase in wages and salaries in the last ten years. That is not the experience of people in the private sector whose pay is tied directly to the state of the economy, not to some magic money tree watered by the delusion that there is such a thing as “Government Money”.

All money that is worth anything is created by buying, selling, and manufacturing, all of which can only be done efficiently and profitably by the private sector.

Only when everyone in society grasps this simple truth, will we get ourselves out of the mess we are in. Everywhere governments or political theorists meddle in a free economy the result is a disaster.

Caving in to the public sector unions at a time like this is not only weak, it is foolish and destructive, smacking of political expediency. What South Africa needs is less government, not more of the same, and particularly not more of a civil service staffed by people who do not know what they are doing.

For all that, they will now get taxpayer’s money (not the Government’s) amounting in total to R18 billion.

In no way can this be a triumph for government or an example of sound economic sense on the part of the unions.

If, as seems likely on the evidence, the local government unions achieve similar awards, the damage and the public outrage will be inevitable.

Issued by Dean Le Grange, Media and Digital Co-ordinator, Cape Chamber of Commerce and Industry, 27 July 2021