It was likely that wage settlements in 2008 would reach levels not seen in a decade, the SA Institute of Race Relations said on Wednesday.

This was "due to the relatively high inflation South Africa was experiencing, driven primarily by high food and fuel prices.

"Inflation for 2008 was very likely to be in excess of 10%," SAIRR researcher Marius Roodt said.

The average wage settlement in SA in 2007 was 7,3%.

This was the highest level since 2003, when the average wage settlement was 8,9%, according to the latest South Africa Survey, a yearly review of the country published by the SAIRR.

In 2007 the average inflation rate was 7,1%.

"This made 2007 the fifth consecutive year where the average wage settlement had outstripped the rate of inflation," Roodt said.

In 2004 the average wage settlement was 5,4 percentage points higher than that year's average inflation rate.

The average wage settlement in 2004 was 6,8%, while average inflation was only 1,4%.

Roodt said that in the past ten years inflation outstripped the average wage settlement on only one occasion.

This was in 2002, when average inflation was running at 10,1%, while the average wage settlement was 8% in that year.

"South African workers whose wages are determined by bargaining laws thus obtained real wage increases in nine of the last ten years," Roodt said.

To subscribe to Engineering News's print magazine email subscriptions@creamermedia.co.za or buy now.