Employers, employees await minimum wage announcement
An panel will report back to the National Economic Development and Labour Council and an announcement will be made on Sunday.
JOHANNESBURG - Employers and workers are now waiting to see what the expert panel on the minimum wage will recommend as the level of the wage as it’s now due to report back over the weekend.
Deputy President Cyril Ramaphosa said on Friday that the panel will report back to National Economic Development and Labour Council on Sunday.
The African National Congress said it would introduce a minimum wage while campaigning in the 2014 national elections.
The coordinator of the National Minimum Wage Research Initiative at Wits University Gilad Isaacs says researchers usually start determining the rate of a minimum wage by asking how much it costs a month to keep a family of four out of poverty.
“In South Africa we’ve looked, in particular, at the poverty line. Our working poor line in 2016 works to around R4,300.”
Isaacs says researchers do need to take into account the general economic picture.
“Have both to do with the ability of businesses to afford it but also to account for some of the positives impact around the reduction in poverty and a potential increase in spending in the economy.”
He says a minimum wage will reduce inequality and could boost demand.
But the head of the National Employers’ Association of South Africa Gerhard Papenfus says the wage simply must not be set too high.
“If the minimum wage is pitched on a level that employers don’t want to pay, they are simply going to either not employ or break the law. But employers will never pay more than what they want to pay.”
Papenfus says the panel needs to tread carefully.
“The higher the minimum wage, the higher the job losses. It’s without a doubt that if the minimum wage is pitched higher than what the market wants to pay, it will lead to job losses.”
He says that people could end up losing their jobs if this is not implemented properly.
(Edited by Winnie Theletsane)