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Cape Chamber takes on Cosatu

May 09 2011 18:04 I-Net Bridge

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Cape Town - While the Cape Chamber of Commerce shares Cosatu's fears of an economic and social catastrophe if the unemployment trend is not reversed, the union federation makes the situation worse with its unreasonable demands for wage increases, the chamber's president Michael Bagraim said on Monday.

"The wage increases that are being sought are unsustainable and will undermine growth in the economy, making job creation an impossible task. We urge Cosatu to be reasonable in their demands," said Bagraim.

Bagraim said the public service wage bill, which accounts for 40% of government expenditure, had doubled in the past five years and workers were still demanding increases that were three and four times the rate of inflation.

He said this was illustrated by the new demand for an 18% wage increase for municipal workers.

Last year, after a strike before the Fifa World Cup, they were given an 8.4% increase on top of an increase of 13% in 2009.

"These demands come at a time when the inflation rate is below 5%. They are unaffordable and they will simply discourage municipalities from filling vacancies or creating new jobs. We already have a service delivery crisis in local government and demands like this will make the situation worse," Bagraim said.

He was concerned that Cosatu did not understand the underlying causes of unemployment. Instead they insisted, he said, on blaming labour brokers and the use of contract workers for unemployment.

"Labour brokers find jobs for workers and they find workers for industry. Surely that is a constructive contribution. If there is abuse it should be rooted out, but it is important to remember that very often the temporary jobs arranged by brokers become permanent ones," Bagraim said.

Bagraim said it was time that Cosatu began to think of the welfare of the unemployed and not just the working elite who had threatened to wreck the soccer tournament and were now threatening the municipal elections to get their way.

He said the demands came at a time when the private sector had to endure wage freezes and retrenchments to survive the recent recession.

Bagraim contended that wage increases granted in the public sector were used as a benchmark to justify demands for increases in the private sector. The result was that costs were going up and the country was losing its competitiveness in global markets. This would hasten the day of a "jobs bloodbath" which Cosatu feared, Bagraim said.
cosatu  |  cape chamber of commerce  |  town  |  cape
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