South African Steel Workers Strike as Pay Talks Deadlock
South African steelworkers embarked on a national strike on Tuesday after talks on a new three-year wage deal deadlocked, dealing a fresh blow to the struggling economy.
Members of the National Union of Metalworkers of South Africa didn’t report for duty in five of the nine provinces and picketed and staged marches instead, its spokeswoman Phakamile Hlubi-Majola said by phone. While the union represents about 155,000 steel workers, more than 300,000 were expected to down tools, including some from allied unions, she said.
About 2,000 workers marched in Johannesburg’s central business district to hand over a petition outlining their pay demands, according to Lucio Trentini, chief executive officer of the Steel and Engineering Industry Federation of South Africa, who accepted the document on behalf of employers.
Employers want to restart talks “as soon as possible” so the strike can end and shuttered businesses can re-open, Trentini said. “We want to find points of disagreements and to work through those to get a deal they can take back to their constituencies.”
Numsa, South Africa’s biggest union, is demanding that pay be increased by 8% in the first year the pay deal, and by 2 percentage points above the inflation rate in the subsequent two years. It also wants raises to be backdated to July, and said its members will strike indefinitely until their demands are met. South Africa’s consumer inflation rate was 4.9% in August.
The labor action is the latest blow to an economy that contracted the most last year since white minority rule ended in 1994 due to stop-start shutdowns that were imposed to curb the spread of the coronavirus. Efforts to rebuild were dealt a setback in July, when deadly riots erupted in two provinces and thousands of businesses were looted. The Congress of South African Trade Unions, the country’s largest labor group, said it will stage a separate strike on Thursday to pressure government to fix the economy.
The steel strike is affecting some mining, construction, engineering and metallurgical businesses and will eventually hit automakers if they can’t secure steel supplies, Trentini said.
“Our sector is in a sense a microcosm of the South African economy with everything from listed to owner-managed companies and family businesses,” he said. “If that value chain is disrupted, the knock-down effect is throughout the entire economy.”
©2021 Bloomberg L.P.