Business
South Africa’s Eskom hikes pay offer to ward off strike
Eskom plans steep increases in electricity prices to pay for the new power stations needed by the country’s energy-intensive mining sector, adding to inflationary pressure and taking more money out of middle class paychecks.
Its 2008 power crunch forced mines and smelters to shut for days and deterred new mining and manufacturing investment.
Impact of Strike
Economists have said well above inflation wage settlements hurt the country’s competitiveness and long-term outlook by driving up the costs for a labour force already more expensive than those in other emerging markets and far less efficient.
“The impact of the strikes is to reduce consumption, reduce production and affect economic growth detrimentally. They are inflationary and in the longer term they reduce employment,” said Rob Jeffery, a senior economist at Econometrix.
In a separate strike that has lasted about two weeks, the union that represents about 70,000 fuel, paper and chemical workers said employers walked out of talks on Friday after the union lowered its demand to 9.5 percent from 13 percent.
Employers were insisting they could only afford an eight percent increase, said Simon Mofokeng, general secretary at the Chemical, Energy, Paper, Printing, Wood and Allied Workers’ Union (CEPPWAWU).
Mofokeng said employers insisted in wage negotiations on Friday their 8 percent offer was final. The union was waiting for a mediator to intervene, he added.
South African workers at global diamond mining giant De Beers began a strike on Friday, seeking 15 percent wage increases while De Beers is offering 7.5 percent and a one off payment of US$369.
