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South African Truckers Lose Despite Wage Agreement

DURBAN, South Africa, Oct 13 2012 (IPS) - The signing of a wage agreement between transport workers’ unions and employers on Friday, Oct. 12 may have brought a three-week long truck driver’s strike to an end but analysts say the effects are far reaching and will continue to impact on the South African economy.

“My estimates are that the strike has cost the economy 15 billion rands (about 1.7 billion dollars),” said labour economist Loane Sharp. “That cannot be made up when a strike ends because it relates to cancelled supply contracts.”

Sharp told IPS that the retail and wholesale trade sectors of the South African economy were likely to have felt the effects more severely, together with the logistics and manufacturing sector.

Wage negotiations between transport workers’ unions and employers’ body, the Road and Freight Association, began in June at the National Bargaining Council for the Road Freight and Logistics Industry and continued until early September when the former declared an official deadlock, and announced an indefinite strike which resulted in empty shelves at supermarkets across South Africa.

Service stations in small towns also ran out of fuel due to delays in deliveries and some ATMS around the country were also reported to have run out of cash.

The strike was marked by violence which left several truck drivers injured and one dead, and a number of trucks damaged or destroyed.

But on Oct. 12, the Road Freight Employers’ Association announced that it had struck a three-year wage deal with truck driver unions. The deal was staggered over three years and entails a 10 percent wage increase in the first year, eight in the second, and nine in the third.

Independent labour analyst Gavin Brown told IPS that the average consumer would also have a price to pay.

“The transport strike has obviously damaged the economy in that it has retarded economic growth for the year across a range of sectors, which means less wealth creation, and less tax revenue,” he explained.

“But, more importantly, together with the violence post Marikana – it has encouraged a mini-flight of capital from the country which we will all have to pay for through inflation and more expensive imports, especially petrol, in the months ahead,” Brown said. The Marikana platinum strike, in South Africa’s North West Province, made international headlines after 34 miners were shot dead by police after protests turned violent on Aug. 16. The death toll later climbed to 46.

Sharp added that the strikes could also have an adverse effect on the country’s employment rate. “What these strikes mean is that there’ll be less employment – for every one percent extra wage demand, employment falls by 0.7 percent.”

Even strikers themselves would be affected, he pointed out.

“Strikes are irrational because it takes workers three to five years to make up the earnings they have lost.”

Road Freight Employer’s Association chairperson Penwell Lunga told reporters on Oct. 12 that workers had lost millions of dollars in wages as a result of the strike.  “Workers lost R271-million in wages while employers suffered a R1.2-billion loss a week,” he said.

Sharp said that strikes were nothing new within the South African context.

“This occurs every year – every year we have a strike and every year workers are demanding higher wages than their labour productivity can justify.”

Sharp said wages should be connected to productivity. “In South Africa wages are connected to numbers that unions suck out of the air, which makes our labour uncompetitive internationally.”

He said that workers should make agreements with employers, which linked their wages to productivity.  “Then employers will be happy to pay them potentially more than they demand.”

Michael Singh*, a senior staff member Time Freight, the country’s leading national courier company, welcomed the news. “The strike affected us really badly. We had no drivers or assistants – I’m not a driver, but I was actually on the road myself for a week,” he told IPS.

He said that the economic losses to the company had been severe.  “I don’t know the exact figures but we lost a lot of business. Three of our offices had no staff; the others were barely staffed.”

He added that whilst he understood why truck drivers wanted an increase, he did not agree with the way they went about demanding it. “We’ve been shot at – a bullet just missed one of our drivers, our trucks were stoned, we had broken windscreens and broken mirrors.”

According to Brown such violence was unnecessary.

“Our collective bargaining system is already very sophisticated given the structure of our economy and the composition of the labour force. The system is capable of addressing all the issues behind the current strikes but was never intended to deal with armed insurrection and criminal violence on the scale we have seen recently,” he said.

*Name changed.

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