Public servants need lessons in basic economics

Economics Source: Google Images

The continuing insistence of public service unions on a 7% pay increase, 4% above inflation, for their members, has people in the private sector shaking their heads in disbelief.

Most private-sector employees know that their pay depends on the success of the business that employs them. They know it’s suicidal to insist on high salary increases – or indeed any increase at all – when the business is on the edge of bankruptcy.

How does one explain such apparent lunacy?

The most obvious one lies in public service hiring practices. They have been subverted by ideology. Balancing the racial composition of the public service was needed but it has too often downplayed the skills demanded resulting in corruption of the original intent of the post-1995 policy.

There are worrying allegations of other non-job-related factors creeping in. True or not, there has been over-manning in the broader public service that includes the numerous state-owned enterprises, the municipalities, and a State wage and salary bill the Treasury believes cannot be afforded. Despite this, the public sector trade unions seem determined to keep the cornucopia of union dues regularly topped up.

Next among possible explanations of the attitude is the extraordinary ignorance of public servants and their union leaders of the state of the South African economy. Surely by now, everyone who can read, listen to the radio, or watch television must know the country is in deep financial trouble? It appears not.

Yet it is obvious there is no extra money to be had. The small number of people who pay income tax (including public servants) have been squeezed to their limits; the state-owned enterprises are chin deep in debt, Eskom cannot guarantee an electricity supply, South African Airways, the railway system, and Denel, are economic Dodos on the brink of collapse. Why is this not obvious?

Logic says public servants at all levels—local, provincial and national – should ease off wage demands and tighten their belts like everyone else. Instead, the belief in a magic money tree maintains its strong hold on the public service mind.

It is ignorance without parallel in South African history. Searching for a cure, one grasps at a compulsory course in first-year economics for every teacher, policeman, and nurse (a group suffering like everyone else) together with all municipal and provincial workers, with a double-dose of economic reality for public service workers e in the first-class seats on the gravy train.

Maybe, when economic reality dawns, public service trade unionists will instead of asking for impossibly high pay rises, demand that their monthly union dues be reduced instead — at least until the country’s economy revives.