STEVEN FRIEDMAN: Wage cut masquerade will end badly — again
The government has acted tough before to impress the markets … and the unions pushed back
The only credible reading of last week’s budget is that the government believes a public-sector strike will boost its credibility in the marketplace. But when governments get tough with unions to impress the markets, things tend to end badly. There is no reason to believe they will end better now.
Whether finance minister Tito Mboweni did discuss cutting public-sector wages with the unions before the speech (he says he did, they say he didn’t) hardly matters. Anyone who knows how bargaining works will know that announcing a huge cut in the wage bill before the unions agree will force them to say no. If the government wanted union agreement, it needed to have reached agreement with unions before the budget announcement...
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Subscribe now to unlock this article.
Support BusinessLIVE’s award-winning journalism for R129 per month (digital access only).
There’s never been a more important time to support independent journalism in SA. Our subscription packages now offer an ad-free experience for readers.
Cancel anytime.
Questions? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now.