Striking S.African workers to vote on new wage offer

JOHANNESBURG, (Reuters)

Striking South African state workers will vote on Tuesday on an increased wage offer made by the government to try to end a nearly three-week-old strike, the COSATU union federation said.

The government increased its offer to 7.5 percent from 7 percent -- compared to the union demand for 8.6 -- after being ordered back to negotiations by President Jacob Zuma, under growing political pressure over the stoppages. Analysts said the offer improved prospects for a deal to end a strike that has closed schools, prevented hospital treatment and harmed investor sentiment in Africa's biggest economy.

Teachers' union SADTU said its members were likely to reject the new offer. "The general view is that the offer is being rejected and it is going to be difficult to push teachers," SADTU president Thobile Ntola told Reuters. The union claims 250,000 members.

Union officials from a coalition of more than a dozen groups representing about 1.3 million striking state workers said a decision on whether to accept the new offer was likely to come early on Wednesday.

SADTU is the largest state workers' union in the country's biggest labour federation COSATU and has the power to influence other unions to reject the offer. As well as the proposed wage increase, the government raised its offer for a monthly housing allowance to 800 rand ($109). Unions have been demanding 1,000 rand.

The revised housing allowance offer alone would add nearly 5 billion rand to state spending and the entire deal would add about 1 to 2 percent to total budget expenditure.

WAGE BILL

In 2006/07, about 35 percent of tax revenue went to paying state employees and that rose to about 47 percent in 2009/10. Union sources said the government would have to meet either its terms for the wage hike or for the housing allowance for a deal to approved.

Rank and file members, feeling the pinch from lost wages coming from the government's policy of "no work, no pay" for strikers, may want to end the dispute, analysts said. But others are willing to overlook the damage to their finances, feeling they have risked so much already that waiting for a better offer is worth a few more days off the job.

Although the strike's impact on rand, bond and stock markets has been minimal so far, that could change if it spreads to the broader economy. COSATU has threatened a one-day sympathy strike by all its members on Thursday if no deal is reached. Nearly 2 million members of affiliated unions could disrupt industries such as mining, manufacturing and communications.

South Africa is the world's fourth largest gold producer and largest platinum producer, with mines turning out about 488 kg (1,076 lb) of gold and 385 kg of platinum a day. The country's biggest firms, such as Anglo Platinum, Impala Platinum and Harmony Gold Mining have stockpiles of the precious metal and would not be hard hit by a one-day work stoppage.

Africa's economic powerhouse has been hit by a series of strikes in the private and public sector in recent months resulting in above-inflation settlements. In other disputes, workers at miner Exxaro have rejected an 8 percent offer and another strike at a Rio Tinto-BHP Billiton titanium joint venture saw operations shut down on Monday.

State workers said members would be angry if their proposed pay rises were lower than those the government offered earlier this year to workers at major state-owned enterprises, which were more than double inflation, now running at 3.7 percent.

"The sore point is that parastatals received exceptional increases despite their reliance on bailouts from the state because their finances are in a mess," said a public sector paramedic. "I earn 9,000 rand ($1,200) a month. After deductions I bring home about 5,000. If I worked in the private sector I would earn much more," the paramedic said.