By Amogelang Mbatha
(Bloomberg) – South Africa’s biggest labour unions rejected a government proposal to increase the national minimum wage by 5%.
Organised labour at the National Economic Development and Labour Council – a bargaining forum that has government, business, labour and community representation – wants wages raised by at least 12.5%, Sizwe Pamla, national spokesman for the Congress of South African Trade Unions, said in an emailed statement on Tuesday.
The unions want pay to take account of inflation in the three years since an initial agreement was reached on wages, Pamla said. That accord set minimum amounts of R20 ($1.37) per hour for general workers, R18 for farm workers and R15 domestic workers.
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The initial agreement was reached in March 2017 and average annual inflation was 5.3% in that year. The rate dropped to below 5% in 2018 and reach a nine-year low of 4.1% in 2019. The central bank, which has flagged wage growth as a risk to price stability, aims to anchor inflation expectations close to 4.5% and its forecast shows the rate remaining near that until at least the end of 2022.
The groups comprising Cosatu, the country’s biggest labour group, the Federation of Unions of South Africa and the National Council of Trade Unions also requested that farm, domestic and public-sector workers receive higher increases to reduce any possible gaps between their pay and the national minimum wage, Pamla said.
South Africa officially introduced a national minimum wage in January 2019 to protect workers from “unreasonably low wages” and promote collective bargaining.
