June 6, 2018

The National Minimum Wage

One of the days to be remembered by many, perhaps most, South Africans could be Tuesday the 29thof May 2018, when Parliament passed the National Minimum Wage Bill (together with the Basic Conditions of Employment Bill and the Labour Relations Amendment Bill). The main motive behind the National Minimum Wage is to better the lives of South African workers who are within the low income brackets.

When the bill was first introduced to the public in 2017, it created a public debate, but it was not wide-spread as compared to recent debates. The bill was supposed to be passed and implemented in May this year; nevertheless, it is yet to pass through the National Council of Provinces before it can officially become law. It might be over a year (or even two, who knows), before the arguable minimum wage bill passes the National Council of Provinces and becomes law.

When one considers the recent VAT increase from 14% to 15% together with the increase in petrol and food prices, the living costs of the lower-paid South African workers will have risen immensely by the time this bill is passed and implemented.

The proposed minimum wage includes a few measures including, but not limited to, one that was set at R 20.00 per hour, which amounts to R 3 500.00 per month to those who work 40 hours a week, and R 3 900.00 to those who are working 45 hours a week. For domestic workers, the minimum wage is proposed to be R15.00 per hour.

Those supporting the bill are pointing out that R 3 500.00 a month is the proposed minimum income. Somehow, President Ramaphosa supports the bill as he recently imparted that more than 6 million workers are paid less than the proposed minimum wage. And for that reason, this group of workers will benefit from the bill, should it be passed.

On the other hand, those who oppose the bill don’t agree with the idea that the minimum wage of R 3 500.00 per month, or R 20.00 per hour is a living wage. They further argue that there are those who would be prepared to work for lower wages. The argument is that the proposed minimum wage will deny the unemployed and/or inexperienced people, especially young people, who ARE prepared to work for less than the proposed minimum wage, the freedom and right to find employment.

In April this year, the South African Federation of Trade Unions (SAFTU) protested against the minimum wage from the other side – they argue that the proposed minimum wage is NOT a living wage and should be more.

And then there is the fact that the cost of living varies a great deal between urban and rural areas – should there be one minimum wage for urban areas and another for rural areas?  How will the boundaries be determined?

The issue is a complex one with merit on both sides. Yes, there are employers for whom the proposed minimum wage would simply be unaffordable and that could lead to job losses.   But on the other hand, our high unemployment rate means that there are thousands of truly desperate people out there who are willing to work for next to nothing. That leaves them vulnerable to exploitation by people who CAN afford to pay the minimum wage but would prefer to pay the least amount that a prospective worker will accept.

It is a thorny issue that is going to require a great deal of wisdom on the part of the legislators to find a solution that is in the best interests of ALL South Africans.

Koena Seanego

 

 

 

 

 

 

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