Strike deals fresh blow to reeling economy

Written on 10/07/2020

SA unions representing workers across a range of industries staged a one-day national strike on Wednesday, dealing a further blow to the economy.

By S’thembile Cele and Mike Cohen

(Bloomberg) — South African unions representing workers across a range of industries staged a one-day national strike on Wednesday, dealing a further blow to an economy battered by the coronavirus.

The protest was called by the Congress of South African Trade Unions, the country’s largest labor group, to highlight a litany of grievances, including job losses, an inadequate public transport system, corruption and state spending curbs. The country’s other three main labor associations endorsed the decision to stop work.

“It is going very well,” Cosatu spokesman Sizwe Pamla said by phone. “We will need to get a report back on the workplaces that were shut down. We know though that the mining sector has been heavily impacted, as well as some schools.”

Africa’s most industrialized economy shed 2.2 million jobs in the second quarter after a five-week lockdown shuttered most businesses, with the central bank expecting it to contract 8.2% this year.

The strike coincided with the start of a two-day cabinet meeting to discuss a revival plan for the economy. The government’s priorities will include increasing infrastructure investment, promoting mass employment and clamping down on crime and corruption, Jackson Mthembu, a minister in the Presidency told reporters.

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Worker outrage

Outrage among workers who retained their jobs and face pressure to support those affected by the economic meltdown has been stoked by allegations that state contracts to provide protective equipment to tackle the coronavirus were tainted by graft.

“Both public and private sectors have demonstrated unbelievable levels of grand-scale corruption without regard for the suffering of our people,” Cosatu said in its strike memorandum. “This is a struggle against greed, parasitism and institutionalized profiteering at the expense of poor people and workers.”

Unions representing civil servants are also up in arms over the government’s plans to renege on an undertaking made in 2018 to grant its more than 1.2 million workers pay increases that would lump the country with 37.8 billion rand ($2.3 billion) of additional debt.

About a third of South Africa’s annual 1.95 trillion-rand national budget is dedicated to salaries and freezing civil servants’ pay is critical to Finance Minister Tito Mboweni’s plans to cut government spending by 230 billion rand over the next two years.

Mboweni’s budgetary plans ran counter to measures announced by President Cyril Ramaphosa and agreed with business and labor groups to revive the economy, said Zingiswa Losi, Cosatu’s president.

(Updates with union comment in third paragraph.)