Unions pin their hopes of a new government wage deal, economists remain cautious

Today is D-Day for the crucial public sector wage negotiations.

Unions are keenly anticipating that the government will finally abandon its position of a zero percent wage increase and table a new offer.

During the last meeting between the parties earlier this week, government requested time out to go and consider putting together a new offer.

That raised hopes of a possible breakthrough, particularly among COSATU public sector unions which represent the bulk of the country’s 1. 2 million government employees.

Analysts say the talks have now reached a critical stage.

Economist at ABSA, Miyelani Maluleke says: “A move away from the zero percent wage increase position by the government will go a long way towards ending the impasse.”

But economists say it will send a wrong signal to the markets.

Maluleke added: “The negotiations have already suffered a set-back after the Public Servants Association- a FEDUSA affiliate- and the South African Police Union- a SAFTU affiliate- both abandoning the talks and declaring a formal dispute at the CCMA.”

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Source: SABC News (sabcnews.com)