By Jon Herskovitz
JOHANNESBURG (Reuters) - South African police fired rubber bullets to disperse crowds blocking roads and healthcare workers prevented patients from entering hospitals as a strike by more than 1 million civil servants grew Thursday.
The strike for higher wages that started a day earlier has slowed the treatment of the sick and shut schools across the Africa's largest economy, worrying investors and adding pressure on the government to reach a deal.
The finance minister said he did not see a protracted strike as having a major economic impact. But analysts have said the labour action that also includes customs workers, police and clerks could slow commerce and trade.
Crowds in Soweto blocked a main road near a hospital running through the densely populated area, bringing traffic to a halt and preventing patients from entering.
"When they refused to move, minimum force had to be used. So rubber bullets were fired," police spokeswoman Captain Nondumiso Mpantsha said. Water cannon were also deployed and there were no major injuries, she said.
The unions staged a one-day warning strike last week and said the action that began Wednesday was the start of an indefinite strike aimed at grinding the government to a halt.
Analysts expect a deal to be reached in the next few days at the earliest or by the start of September at the latest, with any agreement certain to swell state spending as the government tries to bring its deficit down from 6.7 percent of gross domestic product.
"We're not seeing the impact in day to day figures, but certainly it would have an effect on sentiment," said Nema Ramkhelawan, a currency analyst at Rand Merchant Bank.
MONEY PROBLEMS
Unions are demanding an 8.6 percent pay rise, more than double the inflation rate, and 1,000 rand (87 pounds) a month for housing.
Last week the government offered to the housing allowance to 700 rand from a previous offer of 630 rand, but refused to increase its wage rise offer of 7 percent.
The housing allowance alone would be equal to about 1 percent of all budget spending and the government has said it does not have the money to pay more.
"We had to make a choice between increasing the salary bill to unaffordable levels by meeting the union demands and cutting other urgently needed services," the cabinet said in a statement.
Adding to the mix was a threat to expand in the coming days a strike of auto factory workers, who are seeking a 15 percent wage hike, to the car components sector. The autoworkers' strike that began last week has slowed production in one of the country's most important industries.
The state workers' strike increases pressure on President Jacob Zuma's ruling African National Congress to reach a deal with organised labour and appease the party's longstanding union allies who also have been a reliable source of votes.
But pressure will also mount on unions as rank and file members lose pay from being off the job and some look favourably on the government's offer.
Public opinion could turn against the unions if a prolonged work stoppage forces parents to find day care for their children, delays treatment at hospitals and slows paperwork at government agencies.
A mid-range civil servant already makes about 40 percent more than the average worker, who earns 6,383 rand a month in salary and benefits, but bottom grade civil servants make about 40 percent less than the average.
Those feeling the pinch the greatest from the strike are the poor who are most dependent on government services.
"There is no appeal to the public," said Sakhela Buhlungu, an expert on organised labour at the University of Johannesburg.
He said the unions risks alienating the public unless they can change their message and tactics.
(Additional reporting by Xola Potelwa and Spokes Mashiyane; Editing by Giles Elgood)
