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SA economy can’t take another strike
Eyewitness News reports that thousands of mineworkers in the platinum sector are preparing to down tools this week to strike for better wages. However, experts have warned that the country’s already-weakened economy will find it very difficult to recover from another mineworkers strike and our credit rating could possibly be affected. How will this affect our unemployment situation?
To put it simply, our unemployment situation will be negatively affected. Here’s why:
- For our economy to tick over we need money and one of the main sources of this capital is foreign direct investment.
- Obviously, investors want to see a return on their money – why else would they invest. However, when the sectors that produce the largest portion of SA’s income (i.e. mining) are constantly on strike – and are not making these investors money – these individuals will, rightly so, be hesitant to invest.
- The mining industry is one of the largest employers in SA so if this industry doesn’t have an inflow of capital to keep their business running, they will have to downscale, retrenching workers and not employing new ones.
The experts agree.
Economist Mike Schussler said, “We have a tendency to strike and that means people don’t want to put money in South Africa because they see we have labour unrest.”
Let’s hope that both miners and workers come to an agreement before it’s too late.
