Johannesburg — An economist has told Business Day that a protracted strike in the public sector will have far reaching negative effects for the South African economy.
Following a decision by public sector workers to reject a revised government wage hike offer on Tuesday, an economist has warned of how the economy will be negatively effected.
Over 1 million workers in the public sector including teachers, nurses and administrative officials are set to strike nationwide on Wednesday.
Workers have been demanding an across-the-board pay rise of 8,5% and a R1000 housing allowance and in response government has offered a 7% wage increase and a R700 allowance.
Danalee van Dyk, senior Economist at Standard Bank , told Business Day that whilst the real impact of the strike would only be realised in a number of months, the negative factors could include: increased inflation, falling short on contracts, depressed productivity and stifled investment.
Van Dyk said that along with these economic consequences, a protracted strike in the public sector will also encourage other sectors to undertake industrial action in order to have their demands met.
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"Strikes set a bad precedent for all sectors and could lead to a wave of retrenchments as unemployment is still high and wages cannot be afforded," van Dyk said.
Inflation will also come under the spotlight in the months following the strike as a drop in productivity coupled with retrenchments and higher costs is said to pressurise the Consumer Price Index (CPI)
Among the most serious outcomes of continued industrial action in the economy is a drop in foreign investment, something van Dyk believes could happen.
"If it (industrial action) carries on for long, foreign investors will think twice as it creates risk in the market," she said.
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South Africa watch out now because there are still evil predators who want to see the down fall of both South Africa and the Government of the ANC. The reason why we are saying this is because any time we tune to the news the prints will always say, workers demostration base on economic. It has been occuring in many occations because they so call rulers of apatheid days still think that South Africa can not be better rule and prosper by any other party but theirs, "the racist apatheid party"; and if one of Africa prominent party such as the ANC allows that to happen, the so call minority group (Blacks) by the racist party during apatheid days will take them further into the abyse of destructions. These people who were the key controllers during the hard labour and back braking bones by Blacks during the fruit of the economic of apatheid days ONLY and still do want to keep it that way through a hidden ideas by creating uncall demonstrations in South Africa. They are doing so because the want to keep their prestige while hidding the evil deeds done to blacks for more that centuries. We "Africa and Africans" hope ANC will never allows such an idea to be inductrinated and put South Africa backward to any other dust ridding third world country - Never should that happen.