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Inflation at more than 6% will boost wage demands.

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The March 2022 edition of this report looked at the potential
impact of higher commodity prices (specifically food and energy) on local producer and consumer price inflation. Trade unions’ elevated wage and salary expectations add an additional element of cost pressure for South African companies. The local labour movement is powerful in its ability to shape remuneration trends due to the country’s high rate of
unionisation. According to the International Labour Organisation (ILO), South Africa ranks 26 out of 104 countries for union membership with a trade union density rate of 28% in 2016 (latest available comparative data). This is notably higher than an average of 22% amongst the 104 economies recorded by the ILO. Due to this high density rate in South Africa, the flexibility of wage determination is constrained. The World
Economic Forum (WEF) Global Competitiveness Report 2019 ranked South Africa a lowly 134th out of 141 countries for wage determination flexibility while cooperation in labour-employer relations is ranked an even-worse 139th.
5 May 2022 4AM English South Africa Business News · Investing

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