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'National minimum wage has pros and cons'

Economic experts from Stellenbosch University say even though there are concerns, the national minimum wage will ensure workers are paid what’s due to them.

Picture: EWN.

CAPE TOWN – Economic experts from Stellenbosch University believe even though there are concerns, the national minimum wage will still ensure workers are paid what’s due to them.

Dieter von Fintel and Marlies Piek, from the economics department at the university, have published a paper which argues the minimum wage may hurt small companies and rural workers.

This is because small-scale businesses may not afford R20 an hour which the government will formally adopt on Workers’ Day next year.

Von Fintel, a senior lecturer in economics, says, however, the minimum wage is a good idea because currently there's fragmentation.

“What this does is it harmonises it and everybody is on the same page. It means there are fewer loopholes because what we find is that when there’s a lot of complexity and policy, firms don’t comply with minimum wages.”

He adds that he hopes there’s proper enforcement.

“What the national minimum wage would do is reduce a lot of complexity and hopefully also increase compliance so that workers can get the higher wage which they deserve.”

Read the full paper here.

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