Jaundiced Eye: Public sector pay crisis looms

It’s a completely predictable routine. The audience watches with jaded indifference.

It’s the annual dance of wage negotiations between the public service unions and the government. As the negotiation quadrille stumbles about, the actual figures being offered and demanded are obviously in flux.

But the detail is just a distraction from the real issue. And that is how much excessive resources will in the end be pumped into an already grotesquely bloated public service? Will it be too much, or way, way, too much?

Both the rate of growth of remuneration and public service staff numbers are unsustainable given the country’s lacklustre economic growth. Disaster beckons.

No one, however, has the courage to take on the labour movement, least of all President Cyril Ramaphosa. It was with the assistance of Cosatu and the SA Communist Party (SACP) that he got his hands on the levers of power.

During the Jacob Zuma years, the public sector wage bill increased by an annual 10.3%, well in excess of inflation. Zuma followed an unstated but key element to ANC philosophy – the more people on the state payroll, the more guaranteed ANC voters there are.

As the Institute of Race Relations points out, the figures are staggering. A third of all government spending is on public service salaries; state employment has risen by 25% since 1996, to hit 2 million in 2017; and since 1994, pay increases for the public sector outstrip, by far, those awarded in the private sector.

The situation is eerily analogous to the plight of Britain in the 1970s, where the social contract between the powerful union movement and successive governments had deteriorated into a rampant worker militancy.

For comparison purposes, imagine our untouchable SA Democratic Teachers Union, multiplied several fold.

Any attempts to curb union power were thwarted, while the British economy spiralled downwards.

It was a Labour government that in 1976 was confronted with a fiscal abyss and had to slash government spending, bringing it into conflict with the unions and leading to its collapse after only three years in power.

Onto the field of conflict rode the Conservative Party’s iron-willed Margaret Thatcher. She delivered exactly what she promised: the union movement was brought to heel and, eventually, there was a powerful economic recovery.

There persists an enormous antipathy towards Thatcher. It is understandable, but in her defence, Britain was in a state of terminal decline when she took over. It was a case of kill or cure.

The era of monetarist certainties, as espoused by Thatcher, is long over. Nevertheless, every country faces at some stage a crisis of such magnitude that it needs a leader willing to take tough decisions, despite vilification and anger.

SA is approaching that crisis, but given his debt to the unions and the SACP, that person is unlikely to be Ramaphosa.

The truth is that nothing will change until it has to. Like Britain, SA has to topple into the abyss and then pick itself up and find a way out.

The feel-good Ramaphosa era may be very short-lived.

William Saunderson-Meyer.

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