Nedlac’s R3 500 minimum wage – too low a starting point?

In a country with the widest Gini co-efficient in the world, proposing a national minimum wage of R20 per hour is hardly going to have the same impact on her credit rating as failing to reform the tangle of black empowerment laws in mining or cleaning house in government. Deputy President Cyril Ramaphosa – not a union favourite since Marikana – has stressed that the R3 500 (or R20 per hour) national minimum wage being proposed by the National Economic Development and Labour Council (Nedlac) is merely a ‘start’ for wider consultation. The Nedlac panel might do well, for once, to listen to the Young Communist League and even the EFF, who back the R4 500 figure which Cosatu put to parliament two years ago. One wonders how crippling to the economy such a minimum wage would be when the inequities we live with, (forget the moral argument), threaten the very basis of our democracy. Those with far less are becoming increasingly restive over the lack of service delivery as they watch those at the very top getting fatter by the day and continuing to ignore all sanctions with almost complete impunity. One, albeit controversial, sentiment with the land grabs in Zimbabwe was regret by the ‘haves’ that more wasn’t willingly shared earlier. Let’s not go down that road in our wage negotiations. There’s too much to lose. – Chris Bateman

by Renee Bonorchis

(Bloomberg) — The country’s proposed national minimum wage amounts to R20 per hour and brings South Africa a step closer to tackling poverty, inequality and unemployment, South African Deputy President Cyril Ramaphosa said to reporters in Johannesburg on Sunday.

“It is by no means the final figure of what the national minimum wage is going to be,” Ramaphosa said. A panel, set up by the National Economic Development and Labour Council, has made these recommendations which will be taken to all social partners in Nedlac and they can accept or reject the proposals, Ramaphosa said, adding that lawmakers and the public will also have opportunities to discuss the minimum wage.


The report comes as Moody’s Investors Services and S&P Global Ratings prepare to deliver their assessments on the nation’s debt in the next two weeks. S&P, which ranks South Africa one level above non-investment grade, has said the country needs to reform labor laws to reduce protracted strikes, create certainty about black empowerment laws in mining and ensure greater cohesion within government if it’s to maintain its rating.

EFF rejects proposed minimum wage, ANC welcomes it

by Jeff Wicks

Johannesburg – The EFF has slammed the proposed National Minimum wage of R3500 per month, announced by Deputy President Cyril Ramaphosa on Sunday, saying that the move favours business at the expense of workers.

Ramaphosa announced the findings of the National Minimum Wage (NMW) report. Among them, is a proposal of an NMW of R3500 per month or R20 per hour.

“The proposal will not lead to the desired resolution of the problem of inequality. Instead, it is going to institutionalise these inequalities at low poverty wages,” EFF spokesperson Mbuyiseni Ndlozi said in a statement.

Mbuyiseni Ndlozi. Image: Drum.
Mbuyiseni Ndlozi. Image courtesy of Twitter

“Any minimum wage that is below R4500 will not make any difference to the lives of workers or the resolution of inequality in wages and actual living conditions. Above all, wages of South African workers have higher dependency ratio whereby an individual income has stretched high and unusual number of dependencies,” he said.

“We further reject the idea that there must be exceptions for farmworkers and domestic workers. We reiterate that no one, from petrol attendants, security guards, farm and domestic workers, to cashiers in all big retail stores; no one must earn less than R4, 500 per month,” he said.

“The EFF will not support Ramaphosa’s proposal and will mobilise all workers to reject it in favour of a much more meaningful National Minimum Wage of no less than R4500.”

Lonmin ‘could have paid more’

Already in the Marikana commission, it was proven that Lonmin could, taken its profits, afford to pay workers the demanded minimum wage of R12,500, the EFF said. This was four years ago already.

The party said the process of minimum wage is long overdue and requires a genuine, aggressive and speedy resolution to exert discipline on private capital which has taken advantage of people’s  lives for far too long.

The ANC, however, welcomed the announcement.

Spokesperson Zizi Kodwa said: “The African National Congress notes and welcomes the release of the Nedlac Advisory Panel on the National Minimum Wage. We believe this goes a long way to giving effect to the electoral mandate to the ANC government to introduce a National Minimum Wage.”

“The recommendations contained in the panel’s report are sound, credible and clearly supported by clear evidence, including technical submissions made by organised business, organised labour, government and community constituencies,” Kodwa added. – News24


IRR says minimum wage will entrench structural unemployment

Media statement

The proposed new minimum wage of R3 500 per month will do little to improve the circumstances of existing workers, while further limiting access to the labour market for unemployed people. This is according to analysts at the IRR.

IRR analysts said that over 50% of people in South Africa aged between 20 and 30 years old were not in employment, education, or training. For people of working age without a university education, the labour market absorption rate is below 50%, which is far off emerging market norms.

The proposed new minimum wage will make it much more difficult for people who are currently unemployed to ever find work, while serving as a new obstacle to the creation of small enterprises. According to the IRR minimum wages can be used by large established companies as market protection mechanisms with which to undermine the emergence of small competitors.

At the same time the proposed minimum, especially when sectoral exemptions are taken into account, will do very little to improve the socio-economic circumstances of existing workers.

The minimum has also been set at such a ‘low’ level that it will further open the business community, the ruling party, and government to the accusation that they are promoting the exploitation of the poor. We expect that it will become a new rallying point for critics of the government and the business community.

On balance, it looks like the drafters of the new minimum wage have simply been playing politics, with no regard for the interests of the economy or the unemployed. That the Deputy President, Mr Cyril Ramaphosa, has championed what is effectively a charade, when real solutions to the problems of poverty and unemployment are needed, calls into doubt his leadership temperament.

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