Are some union leaders living on another planet?

9 July 2021

It is that time of year again. The time when trade unions seek to wrench greater salaries and wages from the supposedly infinitely cash-rich employers in the private and public sectors. As always, the common denominator is that their pay demands bear little or no connection to the economic world where most ratepayers and taxpayers live.

Apart from the bottomless cash pit they presume exists, the union leaders appear to believe their members deserve special treatment, regardless of the state of the local and world economy, and should continue to get annual above-inflation increases– as indeed they have enjoyed for the last decade.

Those in the public sector harbour the illusion that since they work for the government all they have to do is issue strike threats and darkly hint at bringing the country to its knees, with an added unspoken threat to withhold votes for the party in government.

Their overreaching position is that civil servants are poorly paid, generally ill-done-by, and live at the bottom of the economic heap in a deeply unfair political and economic system.

And indeed it is true that rank-and-file teachers, nurses, and policemen are not highly paid but they do have advantages not generally available to the private sector workforce. For one thing, civil servants have a job for life with small regular increases in pay that depend almost entirely on time served.

Generous rock-solid pensions are a given, as are medical aid, free uniforms for the police and military, regular leave, and teachers get and deserve additional breaks.

Compare that with employees in the private sector. Company pensions are not automatic, neither is sponsored medical aid. Leave is legally compulsory but many family businesses work 24 hours a day seven days a week.

Most significant of all the differences between public and private employment is that private sector pay increases are dependent on the success of the company. Public sector employees tend to think an annual increase equal to or above inflation is a mere matter of shaking the Magic Money Tree when in reality, every pay increase has to come from taxes levied on other people (ironically, including them).

Instead of this annual charade or Merry-Go-Round, which is made worse by the ridiculous system of sector bargaining which assumes that all businesses are equally able to grant the same pay increases, there needs to be an agreement by all negotiators that more pay for civil servants depends on the strength of the economy and therefore the tax base, in the same way that private sector pay depends on company profits and sustainability.

Perhaps, as we swing into the bargaining season, all sides should consider other significant facts:

The last thing a company in trouble will do is boost its workforce. Contrast that common-sense decision to what has happened in the South African Public Sector between 2010 and 2020:  The numbers of people on the State payroll leaped by an additional 400 000. This at a time of pathetic economic growth. Good news for trade unions dues, perhaps. Not so good for the Treasury.

Then there is the fact that all public servants have seen a steady increase in average pay and perks -- 44% over 12 years – with those on the lower rungs getting the biggest increases.

And finally, the trade union leaders should ponder the fact that 95% of public servants earn more than the bottom 50% of registered taxpayers.

If any of the above facts are new to the trade union leaders, then they truly must be living on another planet.

Issued by Dean Le Grange, Media and Digital Co-ordinator, Cape Chamber of Commerce and Industry, 9 July 2021