Wage negotiations and the process of wage setting are important in the central bank’s thinking because wages are a key price in the economy. You would have often heard central bank governors decry periods when salary settlements are in excess of inflation and productivity growth. I would like to make clear what the Bank’s thinking on this matter is.
We are not opposed to workers receiving real salary increases. Firstly, we feel that there should be an equitable sharing of productivity gains between workers and investors. An unequal sharing of such gains in either direction is unsustainable. Secondly, there must, especially in the South African context, be an appropriate sharing of productivity gains between workers and senior managers.