Picture: SOWETAN
Picture: SOWETAN

This year it appears union demands for wages increases will be in excess of 10%, and unfortunately in the majority of sectors, this will not be sustainable (Labour federation girds for bargaining season, May 16). The economy is showing signs of decline and businesses are looking to cut costs in every department.

Staff costs will also have to be cut at state-owned enterprises. Parastatals are notorious for acceding to every labour demand, but even in this sector, the unions will face unprecedented resistance.

The wage increases this year will be a watershed as the state is trying to introduce a national minimum wage. Already, the Treasury has warned us that the minimum wage as proposed would lead to at least 700,000 job losses. Coupled with double-digit increases in the various sectors, this could be devastating.

We all know that at least 9-million people who are able to work are walking the streets. Unfortunately, the unions only hold a mandate from those who are employed and do nothing for those who are unemployed or seeking employment. It is simple economics to understand that if a business is not showing profit and is not productive, it cannot afford such increases and will be forced to reduce its largest overhead, which is usually staff.

Michael Bagraim, MPDA labour spokesman

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