President Ramaphosa wants lower wages to help revive economy

[Jodes]

Lower government salaries first!

 

[Superjakes]

Am I the only person not interpreting this as "Cyril wants me to take a pay cut"?

I understood this as lower minimum wage, so businesses can afford to employ people that can actually contribute to the economy. Am I missing this?

 

[Fuzzbox]

Lower wages is a joke.
These clowns will burn and destroy more.
Rinse wash repeat .

This will never happen

 

[porchrat]

Not really the sense I got from your first post.

A zero percent increase would've been really fair if you consider the government reneged on their multi-year deal with employees.

Let me explain it in another way:

A direct comparison was made between the 3% increase granted to civil servants, and Cyril's desire to cut wages (not true BTW, he's talking about lowering the entry level wages, not cutting wages across the board as is implied by the title).

A 3% increase is effectively a pay cut given inflation.

If unions were demanding 3% society would largely see it as reasonable. It's the outrageous 18% with various new allowances sort of demands that get people angry with unions. In my opinion civil servants, with this 3% increase, are showing admirable restraint for once. The unions by comparison have a long history of repetitively being unreasonable and that doesn't look to be changing despite the clear economic chaos. Look at what's just happened to Eskom. It now needs to take on even more debt and dig that hole deeper to attempt to meet wage demands it simply doesn't have the budget to meet.

At some point reality needs to take hold here.

 

[SubtleBeast]

Let me explain it in another way:

A direct comparison was made between the 3% increase granted to civil servants, and Cyril's desire to cut wages (not true BTW, he's talking about lowering the entry level wages, not cutting wages across the board as is implied by the title).

A 3% increase is effectively a pay cut given inflation.

If unions were demanding 3% society would largely see it as reasonable. It's the outrageous 18% with various new allowances sort of demands that get people angry with unions. In my opinion civil servants, with this 3% increase, are showing admirable restraint for once. The unions by comparison have a long history of repetitively being unreasonable and that doesn't look to be changing despite the clear economic chaos. Look at what's just happened to Eskom. It now needs to take on even more debt and dig that hole deeper to attempt to meet wage demands it simply doesn't have the budget to meet.

At some point reality needs to take hold here.

Let me put it this way. That 3% is 3% too much. Effective "pay cut" or not. Remember that increase comes with an increase in other benefits too. They were and still are in a much much better position to absorb the financial hardships that befell us these couple of years.
Expecting employees to bear the brunt with no increases while they live in luxury is nothing but disgusting.

 

[TEXTILE GUY]

Correct me if I am wrong, but lower wages result in lower spend , lower economy spent.

Economists feel free to correct me, as I have no idea.

Remove either VAT or TAX.

You can't have both

@FaSMaN - you are quite correct - Lower wages at the SAME rate of tax will indeed screw the economy - because less vat will be collected and less cash will circulate - the credit will rocket and along with it, interest rates and along with it debt default, which will in turn lead to less spending and into recession we go.

@Hellhound105
Agree on the tax.
Consider the rate of PIC is higher than the business taxes, (and before we add stealth tax). Lets look at where the tax goes - something like 37% goes to public servant salaries - so, if you are a professional in SA, roughly R4 out of every 10 you earn goes to tax, and roughly R1.50 of that tax goes to pay a government employee.
With the R6 odd that you get to take home, vat and other taxes takes another R2 odd, and you get the balance of R4 to pay for rent, bonds, food or whatever.

So, either cut the public salary bill or drop the tax which will force the public wage bill to drop.

Those grants

Government suggestions that a basic income grant be implemented have drawn criticism from business groups that say such a plan would cripple the economy. More than a third of South Africans are unemployed and interest rates and inflation are surging.

Thats out of your tax. You had to WORK for the cash, and more than a third of the population are benefiting from you.


Finally, consider that 25% of the population pay 80% of the PIC collected.... or look at it like this ....

SA has population of around 60 million people - 1.6 million pay the bulk of PIC. - around 2.5% of the population.

The ANC and by extension Ramapanther is in power and earning a nice tidy sum, and was put there by the same people who dont have to pay for it ..............

 

[porchrat]

Let me put it this way. That 3% is 3% too much. Effective "pay cut" or not. Remember that increase comes with an increase in other benefits too. They were and still are in a much much better position to absorb the financial hardships that befell us these couple of years.
Expecting employees to bear the brunt with no increases while they live in luxury is nothing but disgusting.

Oh I agree, the 3% is still 3% too much.

I'm merely pointing out that, relative to the reckless demands the unions are making (the same unions I remind you, that are currently refusing to budge while the economy collapses around them), that 3% is downright reasonable.

That cannot be denied.

 

[Milano]

Lowering wages will not bring back the industries already decimated by wage increases. Should have first considered the old adage measure twice, cut once before experimenting with policies better suited to successful developed economies.