South Africa cannot afford pay demands from thousands of public service workers and hopes a deal can be reached next week before a strike widens to nearly a million workers, a minister said on Friday. Thousands of workers from the Public Servants Association union walked off the job on Thursday, causing little impact so far to Africa's biggest economy.
But that could change if the country's biggest labour group makes good on its threat to join the strike next week, which could cripple commerce. Public Service and Administration Minister Richard Baloyi told reporters that unions representing the workers had until August 4 to agree to the government's latest offer.
"The pen is dropping on Wednesday. If it isn't dropping, the ink dries. We have to put this issue behind us," he said. The government had other priorities that included building schools, roads and police stations, and any additional spending on wages would stretch sparse resources too thinly, he said.
"There is no leader in South Africa who will say that the government should stop increasing the number of police, nurses, teachers and other categories of public servants in order to use the money that the government has to pay for the salary increments for existing public servants," he said.
Baloyi said the government had already exceeded its budget with its initial offer, and might try to impose its wage increase plans if talks fail with unions. Analysts expect a deal tilted in favour of the unions' demands, which would head off a mass labour action, since the government usually buckles in wage negotiations with organised labour, a long-time ally of the ruling African National Congress (ANC).
Workers including nurses, teachers and immigration officers have rejected the government's 6.5 percent wage offer and are demanding an 8.6 percent increase and a 1,000 rand ($136) monthly housing allowance. Baloyi said the government, whose initial budget forecasts had allowed for wage increases at 5.2 percent inflation, had raised its offer on the housing allowance to 630 rand per month, and would not be enhancing its terms further. It is concerned that giving nearly a million workers raises of double the inflation rate of 4.2 percent will fan inflation and hurt efforts to trim a budget deficit of 6.7 of GDP.
While Baloyi said he was confident a deal could be worked out, PSA spokesman Manie De Clercq begged to differ. "We will talk to our members on Monday, obviously with an open mind, but I doubt that my members will accept that offer," he said. The government has called in temporary immigration officers who worked during the June-to-July soccer World Cup at immigration posts at major airports. Public sector unions in the country's largest umbrella labour group COSATU have threatened to join the PSA strike as early as next week, swelling the number of potential strikers to 900,000. That would be the biggest public works stoppage in three years.