South Africa has turned the anti-austerity protest amplifier to 11 in recent days. From the Lonnmin massacre and subsequent wage increase to the truck-drivers’ strike and Amplats firing of 12,000 workers, Reuters is reporting that South Africa’s local government worker’s union has now said it will join a nationwide strike amid the labor unrest in the mining sector. Demanding ‘market-related salaries’ this strike would bring the South African economy to its knees – at a time of rising deficit concerns. Critically, this has dramatic repercussions. Since firing people is no longer an option as “Those who are dismissed will make sure that there will be no operations operating and that will cause a massacre just like at Marikana,” some companies will be forced out of business (reducing supply) or suffer significant margin compression on cost increases leaving commodity producers struggling – which will inevitably mean prices for end-users will rise (slowing end-user demand or crushing their margins). It seems the South African labor unions found the M.A.D. card.
This, my friend, is what is awaiting the United States if the Kenyan and his Union friends get re-elected. We won’t see this nightmare end without mass casualties.