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Posted by on Jul 27, 2009 in Business | 4 comments

Inflation Targeting Vs. Salary Increases

27072009449-Striking Municipal Workers Here we have a photo taken earlier today, by myself, of the striking Municipal “workers”. My question to my leaders is the following.

How am I supposed to assist with your inflation targeting when you keep agreeing to higher than target salary increases?

Surely you have realised that the different labour sectors look to what each other earn and use that in determining their wage increase offers. Meaning, if the doctors get 12%, what makes you think the municipal workers are not going to demand at least 12% ? You have basically set the salary increase target range for all sectors at 12%, double the inflation target range.

If you set an inflation target you should abide by it yourselves. I understand that the wage portion of your inflationary pressure might have a lower weighting than mine, but it  is still the message you are sending.

I also feel that some sectors are underpaid but we need to find a way to separate basic/minimum wage levels from annual increases. The wage negotiation process also needs to be more transparent. Strikes are not always about percentage, but more often than not involve working conditions and things like medical aid, pension provision, etc.

My minimum wage is more than 10% above industry guidelines, the more senior positions are over 50% above guidelines, but these are people who have worked hard at building their “value”. So to me a 10-12% increase has a much bigger Rand value than an employer only paying minimum wage.

So please, try to differentiate between basic earnings and its percentage increase from annual increases, and communicate this to the sectors so as to create an understanding of increased “basic” earnings and the difference thereof to annual increases.

4 Comments

  1. You sure that was taken today? Looks like a very peaceful Municipal workers strike. Most unusual!

    • Very peacefull actually.

  2. That pic was taken before some decided to trash the streets.

    • Suprisingly not, this was taken in Kempton Park not the CBD

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