IS ANOTHER ANTI-POOR INFLATION MASSAGE LOOMING? (18.07.2008)

Forget all the arguments that have raged this week about weightings and rebasing, about dangerously high pay rises and the technical details of recalculating inflation. So far as the labour movement is concerned, there is only one simple fact to bear in mind: the cost of surviving, let alone living, especially for the working poor, has far outstripped any pay rises granted.
Trade unions have also for years now argued that official inflation figures have lagged far behind the real cost of living for most of the population; that wage rises, invariably measured against an official inflation rate, all too often amount to wage cuts.
This includes the latest 9 per cent to 14.25 per cent deal for garment workers, done via the bargaining council and announced on Monday. What the deal does is narrow the gap between the poorest and the sightly less poor in one of the lowest paid sectors of manufacturing.
According to this deal, slightly better paid workers in urban centres will receive the lower wage rises while the lower paid in more rural centres will take home slightly more in percentage terms. What this means for skilled and experienced machinists working in areas such as Botshabelo, Ladysmith or Caledon is a 12.71 per cent pay rise while general — unskilled — workers in the same areas receive 14.24 per cent.
These are figures that tend to cause near apoplexy among corporate economists and employers. But what they mean in fact is that skilled machinists now earn a basic wage of R399 a week or R1 726 a month while their unskilled co-workers can now look forward to weekly pay of R361 or R1 564 a month. By any standards, these are wage rates below poverty levels.
The women and men who receive these paltry wages also tend spend most of their income on basic foodstuffs. These were the items this column started monitoring in July last year in an urban supermarket. A comparison between the cost of 14 basic items 12 months down the line, is telling.
A year ago this week, the 14 items, ranging from bread and cooking oil to whole chicken, flour and mealie meal, cost exactly R118. This week, the same items cost R172.92, an increase of more than 46 per cent.
However, that staple, mealie meal, showed only a 5 per cent price rise, while samp cost 18 per cent more. Cooking oil, in contrast, almost doubled in price. Overall, what does seem clear is that the cost of living — of surviving — for the lower paid, even before taking into account soaring transport costs, is substantially greater than the official figures show.
In the row this week between Investec Asset Management and the official Stats SA there was agreement that the official inflation figure is “not accurate enough”. The main difference of opinion centred on when the new methods of calculation would be introduced because both parties seemed convinced that the revised calculations will reveal a lower inflation figure.
This rings warning bells for trade unionists and anti-poverty campaigners. They fear that the statistics are about to be massaged to the further disadvantage of the working poor. Of prime concern is the fact that the average amount of disposable income — the weighting — given to food may be lowered in the new year from 26 per cent to perhaps 18 per cent.
Without apparent irony, statisticians refer to the present — and coming — methods of calculation as “plutocratic” as opposed to “democratic”.
“And that really does sum it up,” was the reaction of several garment worker unionists.