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In view of the recent changes to the Labour Relations Act that allow strike action, labour cut-backs could give rise to more strikes this year. ‘This could lead to conflict in the public sector on the matter of privatisation, but it will probably be a brief strike after which the government will continue with its privatisation programme,’ declares Levy.

Labour cut-backs as a result of the decline in the world economy will also place job opportunities in greater jeopardy this year as compared to last year, Levy believes. The average wage / salary increase that was negotiated in central bargaining forums was 7,8% and the average rate for wage increases in other negotiations was 7,4% as opposed to the average inflation rate (CPI) of 5,7% last year. The highest agreement was 9% in the car production industry, where a drawn-out strike in August last year lasted for 15 working days. That led to a loss of 315 000 working days. Mr Andrew Levy who wrote the annual report, expects that average wage agreements will be between 8,2% and 8,5% this year. There is no fear that wage increases will lead to inflation pressure this year, but in the next two to three years it could be cause for concern because real wages increase very slightly while imported inflation pressure increases steadily. Levy predicts that the number of HIV positive people will increase from approximately 4 million at present to 6 million within two years. ‘Organisations can expect to lose more than 4% of their labour force in the following ten years.’

Trade union membership has again begun to increase after a slight drop in 2000 and presently it stands at 3,5 million. COSATU, the country’s largest federation of trade unions, has 1,883 million members. The membership has increased since last year despite severe labour cut-backs. FEDUSA, the second largest federation of trade unions, represents 503 241 members, and NACTU, the third largest, represents 398 106 employees.

Source: Die Burger , October 2002

Activity 1: strikes

Judge the influence of the strikes from the following table:

Influence of: Social conditions Economic conditions
  1. Working days lost
  1. Labour cut-backs
  1. Wage increases

The political role played by trade unions in South Africa is clearly to be seen in the activities of the CONGRESS OF SOUTH AFRICAN TRADE UNIONS (COSATU), an organisation that was established as early as 1985. COSATU is a federation of a group of South African trade unions. In 1985 COSATU joined the UNITED DEMOCRATIC FRONT (UDF) in the MASS DEMOCRATIC MOVEMENT and actively supported the movement in its fight against apartheid. Conditions in the workplace were politicised through strikes, stay-aways and the so-called “go-slows” that had a severely negative effect on production.

Their active participation in the struggle for political and economic change in South Africa led to the fact that COSATU joined the African National Congress (ANC) and the South African Communist Party (SACP) as a partner in the 1994 election campaign. This partnership won the election with an impressive majority. Today COSATU is still part of the three party partnership that governs South Africa. As an equal partner in the alliance it is thus possible that COSATU, which represents a great mass of the workers in South Africa, could offer a significant contribution and exert a profound influence on economic and political policy.

Activity 2: trade unions

Explain the following abbreviations and indicate which occupations are represented by these federations of trade unions:

  1. FEDUSA:
  2. NACTU:
  3. NUM: NUMSA:


Learning Outcomes(LUs)
LO 1
the economic cycleThe learner will be able to demonstrate knowledge and understanding of the economic cycle within the context of “the economic problem.”
Assessment Standards(ASs)
We know this when the learner:
1.5 explains the different flows of money, factors of production, goods and services in the economic cycle within the South African economy;
1.6 discusses the role of the foreign sector in the economic cycle;
1.7 illustrates by means of a graph and discusses how demand and supply influence prices;
1.8 critically assesses the influence and actions (strikes and stayaways) of trade unions in general and during the apartheid era on:
  • the South African economy;
  • political, economic and social transformation;
  • labour issues;
1.9 discusses the effect of the national budget on the economy (e.g. taxation and expenditure on education, social welfare, health and security.)


ACTIVITY1: Strikes

Effect of strike action

Social conditions Economic conditions
Work days lost loss of income – poorer production decreases - losses
Labour cuts loss of employment opportunities– poorer production decreases - losses
Wage increases improvement in expendable income input costs increase – inflation
HIV/AIDS greater pressure on health services work force diminished – losses

ACTIVITY 2: Unions

Identify labour unions

  1. FEDUSA: Federated Unions of South Africa - General
  2. NACTU: National Congress of Trade Unions - General
  3. NUM: National Union of Mineworkers - Mineworkers
  4. NUMSA: National Union of Metalworkers of SA - Workers in the automobile industry

Questions & Answers

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Source:  OpenStax, Economic and management sciences grade 9. OpenStax CNX. Sep 15, 2009 Download for free at http://cnx.org/content/col11074/1.1
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