June 25, 2014

South African miners sign wage deal to end strike

South Africa’s biggest platinum mining companies have agreed to implement wage increases, to end the nation’s longest running strike.

The Association of Mineworkers and Construction Union (AMCU) signed deals with platinum giants Lonmin, Impala Platinum and Anglo American Platinum, which mean that their lowest paid workers’ salaries will rise by around 1,000 rand per month over the next three years.

Workers will also receive additional benefits such as pension, housing and health insurance.

The strike began on 23 January this year, with over 70,000 workers downing tools to demand a “living wage”. This halt in production has affected 45% of the global platinum supply, and contributed to the 0.6% growth retraction during the first quarter of this year.

David N. Margolis says minimum wages can act as an effective tool for reducing poverty and worker exploitation in developing countries. Nonetheless, as Tim H. Gindling points out, whether raising wages reduces or increases poverty depends on the characteristics of the labor market.

Read more on the miners’ agreement here.