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2023-10-03 at 13:49 #422732Nat QuinnKeymaster
South Africa has lost 9 million workdays to protest action so far in 2023 from workers striking due to increasing wage demands, which companies are unwilling to match.
This was revealed in the South African Reserve Bank’s (SARB) Quarterly Bulletin released in September, which analyses economic data from the second quarter of 2023.
In a research note attached to the Bulletin, labour productivity and wage growth in South Africa were analysed.
Wage growth has become a significant issue in South Africa due to the rise in inflation and interest rates over the last two years, putting pressure on employers to raise wages to cover the rising cost of living.
In South Africa, real wage growth contracted as nominal wage growth moderated to below inflation, as measured by the headline consumer price index (CPI).
Following this, demands for higher wages in collective bargaining forums skyrocketed.
On average, workers demanded an increase of 6% and above in 2022. This number has continued to rise in 2023 to 6.4%.
Average nominal wage settlement rate in collective bargaining agreements (%). Source: Andrew Levy Employment Publications
However, companies are unwilling to grant substantial wage increases in challenging domestic economic conditions amid higher production costs due to intensified load-shedding.
This, coupled with workers initiating wage negotiations striving to compensate for cost-of-living increases, resulted in a surge in workdays lost due to industrial action.
The SARB said growth in nominal remuneration has remained below inflation due to the inability of most firms to grant higher remuneration increases in the current environment of weak economic activity and high operating costs.
The impasse created by demands for higher wages and companies’ inability to grant them has resulted in a surge in the number of workdays lost to protest action.
Workdays lost to strike action have risen significantly in South Africa since the COVID-19 pandemic, from less than one million in 2020 to over eight million in 2022.
Bloomberg reported that protests in South Africa may reach a new annual record in 2023.
The country is suffering its worst-ever electricity blackouts, and patience is fraying over the deterioration of municipal services and the rising cost of living, leading to 122 protests in the first six months of the year.
At that rate, this year may overtake the 237 incidents of 2018, dwarfing the lull during the pandemic years.
“Over the last ten years, protests have become increasingly violent and lawless,” according to Kevin Allan, the managing director of Municipal IQ, which tracks the performance of South Africa’s municipalities.
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