Yawning gap between wage demands and offers in South Africa

South Africa's major gold mining companies offered 4% wage increases to the country's mine workers during negotiations in Johannesburg on Monday – a fraction of unions' demands of up to 60% pay hikes.

The opening offer is based on weak gold prices, increasing production costs and falling productivity, company representatives stated, adding that labour costs make up more than 50% of their total expenses.

The offer also includes a 4% increase in living-out or housing allowance.

The raise would push entry level underground and entry level surface salaries to approximately $900 (8,900 Rand) and  $800 (8,000 Rand) per month respectively. These figures include basic wages, living-out allowances, medical benefits and retirement contributions.

The lowest entry-level wage currently stands at about $500 (5,000 Rand), according to data compiled by the Chamber of Mines – an organization of the country's mining employers.

The proposal does not come close to meeting union demands which include pay increases of more than double. In May, South Africa's National Union of Mineworkers demanded wage hikes of up to 60%.

Worker representatives also argue that the raise is less than the current inflation rate of 5.6%, according to The Wall Street Journal.

Mine workers are "pleading poverty," a union representative told the Journal. "This is the opening offer. We know there is room for movement."

Mine strikes have plagued the country's ore industry for years, including labour unrests last year that killed 34 people. Meanwhile South Africa's major unions are fighting a battle amongst themselves, with each group vying for increased membership.

Fearing a repeat of last year's violence, the country's labour minister was considering deploying peacekeeping troops during labour unrests in June.

Negotiations between gold miners and unions will resume on July 24.

Imge from Wikimedia Commons