It’s an encouraging sign that the majority of trade unions have shown an appreciation for the fiscal realities of the country. This week, the unions agreed to the government’s 1.5% wage increase, as well as a R1,000 sweetener.
It was below their demand for an 8% hike, and caps a torrid three months of negotiations. Altogether, this 1.5% will cost SA R18bn, though finance minister Tito Mboweni has said he’ll look for cuts elsewhere, to make sure it’s fiscally neutral.
The Public Servants Association (PSA) in particular, demonstrated a surprisingly mature position. It said that in this time of Covid, it "strives to assist in repairing the damage, trust, and decrease poverty without further damage to the economy."
Make no mistake, the country couldn’t have afforded the unions’ demands. But this deal is still something of a victory for Mboweni, and suggests the days of capitulating to union demands, whatever the cost, are gone.
Quite how this will play out for unions remains to be seen. Many have tried to counteract dwindling membership by taking extremist positions.
Pragmatism might be the sanest solution, but employees who have been promised unrealistic hikes are unlikely to reward this. Still, hopefully this deal will herald a greater and wider appreciation of the need to save an economy on the brink.