Picture: THINKSTOCK
Picture: THINKSTOCK

PUBLIC sector trade unions were able to secure earnings for their members at a rate 40% higher than nonunionised employees in the private sector with the same skills and other characteristics, says an economic analysis by the Development Policy Research Unit at the University of Cape Town.

Measures to contain spending on wages are expected to feature prominently in Wednesday’s budget. The public sector wage bill, which has grown dramatically since 2008, has become a major constraint on SA’s public finances, consuming 40% of government spending.

Credit rating agencies and investors want to see a plan to change the share of government spending on wages in favour of spending that could boost economic growth.

The lead writer of the paper, Haroon Bhorat, said the analysis illustrated that the average civil servant had arguably come to represent SA’s labour elite, with a significant "wedge" between average public and private sector employees. The analysis is part of a broader paper, which is a collaboration with the Brookings Institute and United Nations research institute Unu-Wider.

Due to their obvious success, public sector unions have become increasingly popular with workers. While in 1997 only 55% of government employees belonged to unions, by 2013 union density reached 70%. The opposite trend is seen in the private sector, where union membership is shrinking. Union density in 2013 was 24%, compared with 36% in 1997.

The paper also shows the dramatic growth of jobs in the public sector which, according to Statistics SA’s Quarterly Labour Force Survey, added 500,000 jobs between 2008 and 2014.

While national and provincial governments employ 1.3-million people, the Quarterly Labour Force Survey shows that with employment in local government and state-owned enterprises added, the total in 2014 was 2.7-million. As a share of total employment, public sector employment rose to 17.5% by 2014, from 14.5% in 2008.

This shows that, after the global financial crisis in 2008, the government went on a major recruitment drive.

In 2014, the Treasury placed a moratorium on new employment.

The top drivers of new public sector jobs were: office clerks; sweepers and labourers; police and traffic officers; secondary education teachers; primary education teachers; and institution-based personal care workers.

The share of office workers as a percentage of public sector jobs grew 28% over the six years, indicating a spending spree on low-skill office jobs.