Is The AMCU Wage Demand Unreasonable?

Inflation in South Africa is at 5.8%. Demanding a salary or wage increase well above this inflation rate, while resulting in a real increase from an income perspective, "is not sustainable". Well that is a perspective many economists will have, as well as most employers.

I am always baffled by these inflation figures as while I understand it is based on a certain basket of goods,  the numbers never correlate to my cost of living. A simple example that comes to mind for me is the Woolworths chicken leg portion. They sell it cooked, so it is handy for a meal for one or two, depending on your wallet and stomach. 4 years ago, the price of this chicken was close on R17-00. Today, the price is closer to R26-00. That would make the inflation on that piece of chicken in excess of 10% over the period of four years!

You might be thinking, the example is not relevant given it is Woolworths,  regarded a premium store for food, and it's cooked chicken, something not bought by the majority of the population. I won't argue with that logic, but don't mistake that for meaning I agree with your logic if that's your view. Do a test yourself on the things you buy, food related in terms of price over the last four years. Be objective, choosing something that is a basic part to your diet, not a lavish treat. I can only remember briefly when inflation went above 6% but your true cost of living I am willing to bet has gone up by more than 6% each year.

This is purely looking at food inflation, since after all we all have to eat. The cost of electricity, petrol and other support factors in your life are not even a point to debate on how far it is above the reported inflation numbers. The only thing that is accurate is that the world over, cost of living is rising faster than peopke's incomes are rising. From the Bloomberg Businessweek article, reading this was disturbing "Adjusted for inflation, Americans’ real incomes have fallen 8 percent since the start of 2000, according to a December calculation by Sentier Research of the seasonally adjusted median household income".

Once you understand your personal cost of living increase and understand it relative to your salary/wage increase over the same period, you can have a more balanced opinion as to what the Platinum Mine employers are dealing with in terms of the strike where AMCU is being dubbed to be tabling an unreasonable demand. The scale of the increase will always be unreasonable given the bad base that current wages are.