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Labour Q&A with Terry Bell
A Fin24 user, Cyril Mtsweni, observed that salaries have been on a constant decline. He pointed out that the cost of living is much higher than the rate of salary increases.
The educator writes: “Salaries increase by 1% above the inflation rate to about 7% and then your medical aid subscriptions increase by 12%.
“This is coupled with the increases in the petrol price which increase food prices and other basic necessities. To add salt to the wound, the price of electricity also increases at an alarming rate. These factors actually mean my salary has not increased but has in reality declined.
“My standard of living is declining and this makes one increasingly frustrated. Under these conditions, workers find themselves in an unenviable position to go and strike.
“Employers refuse to take actions to avert strikes. In fact they seem to welcome the strikes because they benefit from No Work, No Pay. The workers are left in the same position they were in before the strikes.
“Some sectors have it worse because they don’t get public sympathy.”
Terry Bell responds:
For years I have pointed out that the use of the official rate of inflation (CPI) to determine "fair" wage rises is nonsense since it averages spending patterns from the fabulously wealthy at the top to the poor below.
So food, for example, is a small proportion of the expense of the really wealthy while it accounts for 50% or more of the disposable income of the poor. But because CPI is an average, the weighting given to food in the CPI "basket" is badly skewed. The same applies, particularly, to transport.
In good times or bad it seems that those below get a poor deal: slightly better in the good times and rotten in the bad. And educators, doctors and nurses are, because of the work they do, more prone to emotional blackmail than most other workers.
Surely this situation calls out for clarity of thought, clear analysis and perhaps concerted action for meaningful change?
*Have a question for Terry? Drop us a line.
- Fin24
* Terry Bell is an independent political, economic and labour analyst. Views expressed are his own. Follow him on twitter @telbelsa.
Disclaimer: All articles and letters published on Fin24 have been independently written by members of the Fin24 community. The views of users published on Fin24 are therefore their own and do not necessarily represent those of Fin24.
A Fin24 user, Cyril Mtsweni, observed that salaries have been on a constant decline. He pointed out that the cost of living is much higher than the rate of salary increases.
The educator writes: “Salaries increase by 1% above the inflation rate to about 7% and then your medical aid subscriptions increase by 12%.
“This is coupled with the increases in the petrol price which increase food prices and other basic necessities. To add salt to the wound, the price of electricity also increases at an alarming rate. These factors actually mean my salary has not increased but has in reality declined.
“My standard of living is declining and this makes one increasingly frustrated. Under these conditions, workers find themselves in an unenviable position to go and strike.
“Employers refuse to take actions to avert strikes. In fact they seem to welcome the strikes because they benefit from No Work, No Pay. The workers are left in the same position they were in before the strikes.
“Some sectors have it worse because they don’t get public sympathy.”
Terry Bell responds:
For years I have pointed out that the use of the official rate of inflation (CPI) to determine "fair" wage rises is nonsense since it averages spending patterns from the fabulously wealthy at the top to the poor below.
So food, for example, is a small proportion of the expense of the really wealthy while it accounts for 50% or more of the disposable income of the poor. But because CPI is an average, the weighting given to food in the CPI "basket" is badly skewed. The same applies, particularly, to transport.
In good times or bad it seems that those below get a poor deal: slightly better in the good times and rotten in the bad. And educators, doctors and nurses are, because of the work they do, more prone to emotional blackmail than most other workers.
Surely this situation calls out for clarity of thought, clear analysis and perhaps concerted action for meaningful change?
*Have a question for Terry? Drop us a line.
- Fin24
* Terry Bell is an independent political, economic and labour analyst. Views expressed are his own. Follow him on twitter @telbelsa.
Disclaimer: All articles and letters published on Fin24 have been independently written by members of the Fin24 community. The views of users published on Fin24 are therefore their own and do not necessarily represent those of Fin24.
