Adding to the pressure, a union representing tire makers
announced a strike for higher wages from Monday. Thousands of armed forces
unionized members are also thinking of striking.
This month’s strike by about 1.3 million state workers has
presented Zuma with one of his most serious challenges since taking office more
than a year ago, with unions trying to link the labor action to Zuma’s
political future.
“We will not make a mistake again of voting into power our
worst political butchers,” COSATU Secretary-General Zwelinzima Vavi said at a
rally.
COSATU helped Zuma win the presidency and its support is
essential if he wants to seek re-election. Vavi last week said the alliance
with the ANC forged in the struggle to end apartheid was on the verge of
rupture.
COSATU has already threatened to widen the state workers’
strike later this week to all of its member unions who it says represent about
2 million workers.
A one-day strike set for Thursday will probably not do much
economic damage but COSATU has said the action could turn into an indefinite
strike, which would cause major damage in industries including mining, which
alone is responsible for about 5 to 6 percent of GDP.
Analysts expect Zuma and the ANC government, which has
typically given in to labor’s demands, to reach a deal soon, tilted in favor of
the unions, and worry later about the damage to state spending.
Zuma also does not want to have the dispute hanging over him
heading into an ANC policy-setting meeting in late September.
“It wouldn’t surprise me if there was some sort of
resolution by the end of the week,” labor analyst Tony Healy told Talk Radio
702.
Zuma on Saturday accused striking state workers of
abandoning the sick at hospitals and said he expected a deal to be reached soon
to end the labor action.
An expanded strike would add to worries about prospects for
growth after the economy slowed more than expected in the second quarter of
2010 as mining contracted and manufacturing expanded at a slower pace.
The government has said it cannot afford the state workers’
demand of an 8.6 percent wage rise, more than double the inflation rate, and
1,000 rand ($135.8) a month as a housing allowance. It has offered 7 percent
and 700 rand.
Any agreement to end the dispute is likely to swell state
spending by about 1 to 2 percent, forcing the government to find new funds just
as it tries to bring down a deficit totaling 6.7 percent of gross domestic
product.
Bond, stock and rand trading have mostly been unaffected by
the strike but market players said that could change if there is no deal by the
end of the week and if the strike widens to industries which could hurt local
shares and dent sentiment.