I see that union members are striking over what they perceive to be an unfair wage increase offer of around 7%…they want somewhere between 11 and 20% (depending on who you read) while the official inflation rate is closer to 4%.
On the face of it their demand seems unreasonable and their rejection of the increase which is already 3% more than inflation also seems ungrateful…or is it?
The problem we have (and that the Reserve Bank has) is that hardly anyone believes that inflation really is 4%. This may be the official figure as released by Stats SA and it may be the measure of the change in the “inflation basket” but for most people in South Africa, that basket is a theoretical one which bears little resemblance to reality for ordinary people whose cost of living has increased by much more than 4% pa.
At 4%, the official inflation figure is unbelievable and does not reflect the actual year on year increases for the average South African. No wonder the unions demand more…I would too!