Striking workers urged to get accurate data on employers' financial status.(SABC)
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Economist and researcher at the Alternative Information and Development Centre in Cape Town, Dick Forslund, says mining companies can afford to pay decent wages because they are making huge profits.
Forslund says the mining industry is floating with money. He points out that the International Monetary Fund report has indicated that the South African industry in July was highly profitable. He says the report noted a 15% rate of return on assets, an indication that the industry can afford the salary hikes.
But in an opposing view, Director of Economists.co.za Mike Schüssler, says most companies cannot afford the workers' demands. He argues that most mining companies make most of their profits outside South Africa and they do pay taxes.
Schüssler says there was a commodity boom at unusual times. He adds that profit margins are smaller, maintaining that the hard fact and reality is that companies cannot afford the sort of increases asked of them.
On the other hand, an economist has advised striking workers to get accurate information on their employers' financial status before entering into wage negotiations with them. Financial analysts have warned that South Africa will see more wildcat strikes.
General labour unrest in the country, particularly in the mining sector, has triggered a 4% fall to three-and-a-half-year lows in the value of the rand against the dollar. It has also fuelled concern about growth which government has forecast at 2.7% this year.
