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South Africa
Economy - Development | Labour

South Africa unions shocked at leaders' pay hikes

afrol News, 20 October - Trade unions and workers in South Africa are "shocked" after reports of huge wage increases for the country's wealthiest businessmen while workers are told not to demand too much. "The country's already huge wealth gap is getting even bigger," COSATU, South Africa's leading trade union concludes, condemning the business leaders' "salary hikes".

In a statement issued by COSATU spokesman Patrick Craven today, the trade union says it is "appalled" at the revelations on South Africa's top executives' huge pay increases during the last year. This salary hike was revealed by the South African economy news agency 'Business Report' on Monday.

Mr Craven said COSATU deplored that "regardless whether their companies are increasing their profits, top executives keep getting salary increases way above the inflation rate." Yet these were said to be "the same business leaders who complain about the dangers of wage inflation and do everything possible to prevent their workers from getting even modest real increases in pay," the unionist statement said.

The COSATU spokesman in particular stated his shock over pay hikes by business leaders whose management had shown poor results. For example Chief executive Joshua Malherbe of VenFin, an investment holding company focusing on telecom companies such as Vodacom, had received a 68 percent pay rise in 2004, while the company's profit fell 27 percent.

Chief executive Chip Goodyear of the mining company BHP Billiton is South Africa's record earner, getting rand 29 million in 2004. He is closely followed by Mike Salamon, the same company's second most senior executive director, who took home a package worth rand 26 million, according to COSATU. The mining giant last year was accused of serious labour breaches by its own shareholders.

The revelations in 'Business Report' came shortly after COSATU Secretary-General, Zwelinzima Vavi, raised the same question at a meeting with government officials. Also the COSATU leader was complaining over the increased differences in South Africa and urged authorities and businesses to "transform our economy to benefit not of a few but of all our people."

Mr Vavi also had expressed outrage regarding salary hikes for business leaders. "The executive chairman of Gold Fields raked a 140 percent increase in his salary last year but had the cheek to turn around and warn workers not to expect above inflation this year because of the effects of the strong rand – as if with a weaker rand he would have granted workers even half of the 140 percent increase he got," Mr Vavi said at the recent meeting.

The new salary hikes for South African business leaders clearly suggested that "the country's already huge wealth gap is getting even bigger," Mr Craven today said. "Far from moving towards a more equitable distribution of wealth, we are widening the chasm between the richest and poorest South Africans," the COSATU spokesman added.

All this was happening at a time when more than half of all South Africans, including two out of three children, live in poverty, the trade union recalled. In South Africa's former homelands, unemployment still runs at 54 percent and 70 percent of those employed earn under rand 1000 a month. A recent Labour Research Services report had showed that the average worker would have to toil for 111 years to earn as much as the average executive gets in one year.

Analysts and unions in South Africa are also concerned over the low salaries for the country's skilled labour, including nurses, medics and other academic salaries, which barely have kept pace with inflation during the last years. South Africa is increasingly victim to the so-called "brain drain", losing its skilled workers to better paying labour markets in Europe and North America.

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