Wage increase by Eskom is a generous offer: Economist

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One Economist reckons the unions in the Eskom wage talks are being ambitious by asking for a wage increase higher than 7%.

Chief economist at the SAIRR, Ian Cruickshanks says with inflation at 4.4% and the financial difficulties, the power utility’s 7% wage increase is a generous offer.

Cruickshanks says a higher-than-budgeted-for wage settlement may push up the financial risk to government and the economy.

Unions are currently consulting with their members on the latest offer on the table.

While parties do not want to disclose the offer, Eskom says it has upped the rejected 7% offer, but would not say by how much.

It is believed the power utility has offered a 7.5% increase for the first year and 6.5% and 6.25% for second year and third, respectively.

The unions had demanded an 8% salary increase for 2018, R500 adjustment on housing allowance and 12% on bonuses.

Cruickshanks believes the power utility should try to push costs down.

Eskom says it plans to pursue the number of municipalities and companies that owe it money to offset the demands from the unions. It also plans to trim operating costs and the capital investment programs because of the financial pressures it is facing.

Eskom and the unions are expected to meet again next week to give feedback on the consultation with members on the offer on the table.

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