By: Natasha Archary
Labour Economist, Andrew Levy joins Gugulethu Mfuphi on Kaya Biz to highlight the potential risk for another social unrest due to elevated inflation and interest rates.
This after financial advisory firm PwC warned this week that social risk factors such as higher inflation and interest rates might cause another desperate breakdown like the 2021 July unrest.
PwC said that the country’s high unemployment rate and large social cleavages are drivers for the decline in social cohesion in South Africa.
Levy shares that the Cosatu strike which falls under section 77 of the Labour Relations Act (LRA), enables the working class to express their economic plight and the declining living standards.
“The Cosatu strike which is planned for Thursday, 06 July is indicative of the stress people are feeling.
If you look at the overall headline inflation, it has come down slightly, and the view of most economists is that it will likely continue to fall but, there’s no disputing that it has still risen significantly.
Take a look at the increase in fundamental items for households, rent, electricity, fuel, we’ve seen huge increases in these costs over the last few years.
So, the less disposable income you have, the more this puts pressure on South Africans.”
Andrew Levy – Labour Economist
Levy says that the difference is that those embarking on the Cosatu strike this week are employed, and have an income.
The bleak difference is that there are unemployed people in the country who are reliant on the Social Relief of Distress (SRD) grant, which is just R350.
Due to the elevated inflation and interest rates Cosatu is demanding that the amount of the SRD grant be increased from October.
Listen to the conversation on Kaya Biz:
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