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THE latest mini budget has been closely analysed, especially by rating agencies, business and international lenders to see if it helps avert the slide to a junk status credit rating, says Terry Bell in his latest Labour Wrap. But this usual flurry of comment and analysis will be of little interest to the majority of workers, whether employed, under- or unemployed.
This army of the working and jobless poor, says Bell, are too busy merely trying to survive. And for them, junk status already applies: they live it.
When sovereign debt is downgraded to junk, loans are hard to get and, where available, very costly. This is the reality for the majority of South Africans.
Bell maintains that even those low-paid citizens who qualify for small, regulated loans usually have to pay them back at interest rates that would make a hardened seller of junk bonds blanch. He points out that such loans cost, by law, 60% per annum even before admin and other legal add-ons.
But more than 10 million South Africans are already “credit impaired” which means the only access they often have to additional funds is through the mashonisas, the township loans sharks. Their rates of interest and their methods of collection, says Bell, can generally be described as brutal.
Even workers already earning at the level deemed by Cosatu to be a suitable minimum wage - R4 500 a month - and who are not in debt, face a dire time ahead. Inflation for the poor - always much higher than the official cost of living index - has risen steadily and looks likely to rise still further.
Bell notes that the “priority foods” of the poor have risen over the past year by 25% and more. The cost of the staple, mealie meal, rose by more than 32% in the 12 months to September.
Against this background, he sees it as perfectly understandable that unionised workers will demand a fairer share of the wealth they create. This is because, in most cases, the buying power of their income has decreased: the working poor are becoming poorer.
According to Bell, this calls for radical, transformative policies to be put in place. However, he says there appears to be little political will to break from the orthodox, sticking plaster remedies of the past.
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