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We don’t need a single minimum wage in South Africa: Mboweni

We don’t need a single minimum wage in South Africa: Mboweni

Tito Mboweni, a former governor of the South African Reserve Bank, says that no worker in South Africa should earn less than R3,000 per month.

In a debate on social media, Mboweni called for sectoral minimum wages to be enforced as apposed to a single minimum wage as is being proposed by the government.

“Let’s debate: we don’t need a minimum wage in South Africa. We need a set of minimum wages. No worker should earn less than R3,000.00 pm,” the former governor said.

Deputy president Cyril Ramaphosa said this week: “We are confident that we will soon be able to agree on a level at which the minimum wage should be set that will both improve the lives of the lowest paid workers in South Africa and support our job creation efforts.”

“Introducing a national minimum wage is a step towards restoring the dignity of workers of this country,” he said.

Read: Why a minimum wage debate is irrelevant in SA right now

Mboweni said that mine workers should be paid differently to domestic workers, who in turn should be put in a different bracket to steel and engineering worker, or shop and office workers, or construction workers etc.

He stressed the call for ‘sectoral minimum wages’ and called on the Department of Labour to enforce the Legal Requirement about narrowing the gap. “It is there in the law…enforce.”

“At least nobody is opposed to sectoral minimum wages. Agreed? In that case why are politicians talking about a national one minimum wage,” Mboweni said.

At present minimum wages are set in various specific sectors but there is no minimum wage legislation that applies to all employees in South Africa.

Economist Mike Schüssler says that South Africa’s formal sector is already paying well above the minimum wage as the department of labour debates the level at which it should be set.

The government is set to implement a national minimum wage in the country in 2016; however, it is looking for guidance on what that amount should be.

Currently, wage regulation in South Africa takes place through collective bargaining and direct regulation of pay for vulnerable workers via the sectoral determinations.

The average minimum wage is a monthly wage of R2,731.74 across all the private-sector bargaining councils; and in the region of R2,362.36 across all the sectoral determinations.

Union Cosatu has called for a national minimum wage of between R4,500 and R6,000 to be set for workers in South Africa. This echoes the call from the Economic Freedom Fighters (EFF) to establish a national minimum wage of R4,500 in 2016.

The DA meanwhile, says that while it is not against minimum wages, it needs to be sector specific to avoid job losses.

In an opinion article on MoneyWeb, Schüssler, who is an economist at Economist.co.za, pointed to research indicating a median wage in the formal sector of approximately R5,100 per month.

This, he noted, is above a median figure of R4,800 per month cited by Statistics South Africa (Stats SA) in its Labour Force Survey (LFS). This figure has been at the centre of debate over the implementation of a minimum wage.

For all workers in SA, the median wage is approximately R3,200 a month, according to the LFS.

“The fact is that the formal sector is already paying well above the minimum wages, although there are a few sectors such as agriculture, retail and security industries that pay less,” Schüssler said.

He pointed out that domestic workers and informal sector employees also receive wages below R3,000 a month. However, in the formal sector, monthly wages are significantly higher than the proposed minimum wage.

More on minimum wage

The real minimum wage in South Africa

SA farm workers get minimum wage increase

National minimum wage in SA a done deal: ANC

What the national minimum wage will cost SA


BusinessTech's Staff Writer is directly plugged into the South African Internet backbone, and spits out press releases and other news as they receive it. They are believed to be cl...
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  • Willow

    Never a drive for greater productivity, yet we have one of the lowest productivity levels in the world.

    • chunk

      Its not always in your best interest to be more productive, management just see hey I get two peoples job for the price of one.

      • Willow

        Precisely the mindset which is costing us global competitiveness, Chunk.

        • chunk

          it really goes both ways.

      • hairyback

        If you can manage “two people’s jobs”, then do it. You’ll get twice as much experience as everyone else.

      • Blapartheid Zulu

        Not exactly in South Africa where we are hiring three to do the job of one, if you are productive it’s also most like you will be promoted quicker.

      • Witte Boer

        Amazing logic. You should get a Zuma prize for it…

    • Jon Low

      Productivity — or the lack thereof — results from poor management.

      • Willow

        Or trade union membership.

        • Jon Low

          Good managers can reach a mutually-beneficial deal with unions. Poor managers have no idea how to do so.

          • Willow

            When you are dealing with educated, reasonable, non-politicized Union representatives. The greatest manager cannot reason with the unreasonable.

          • Jon Low

            There are tens of thousands of employers who manage profitable businesses and who have all hammered out a decent deal with their employees and their union reps. Those are the great managers.

            Those who cannot manage to make deals are not great managers. They’re incompetents in blue suits and BMWs.

            Coping with unions is like coping with cold weather in winter. You need a different jacket.

          • Willow

            Did I mention non-politicized? It depends if the union masters WANT to reach a deal.

          • Jon Low

            All unions are politicised. Even TLU/Solidarity.

  • Gardos

    All you need to do is some basic sociological research to know that R3000 is not nearly enough to lift oneself out of the poverty cycle. If this ridiculously low minimum wage continues to exist, we will just perpetuate poverty.

    • rouxenator

      But less people will get hired.

      • Jon Low

        Not if there’s a lot more work that needs to be done.

        • rouxenator

          Most minimum age work can be automated, otherwise just hire less people and work them harder.

          • Jon Low

            You will shell out multi-millions for the automation equipment, which is precisely why employers don’t automate everything and choose to employ unskilled workers instead.

            To get more work out of any workers you need to manage them better — you’ll have to hire and pay supervisors, and have some middle-managers, paid even more, to scrutinise your supervisors and write reports monitoring and quantifying the productivity gains of your management structures.

          • rouxenator

            … or just go and invest in a country with less restrictive labour laws.

          • Jon Low

            In a country where much of the economic activity is located in the primary sector, you cannot really invest elsewhere. You can’t simply move your mines to a different country, nor your agriculture and fisheries.

          • rouxenator

            Correct, but just look where most of the manufacturing it staking place? Besides, if you make it hard enough – and SA is already beyond that – you start noticing the country will import food. Why? Because it’s agricultural and fishery industries are declining as a result of bad labour laws.

          • Jon Low

            Only trouble is that the agric and fishing industries are NOT declining but expanding.

          • rouxenator

            So why are we importing food now ?

          • Jon Low

            Agriculture is not confined only to food crop-growing and stock-rearing.

          • rouxenator

            No, it is because the labour laws killed the food producing business – simple as that.

    • R3000 per month is way too much for an unskilled lazy person. If he’s not willing to work for much much less while he gets valuable experience and discipline, he’s probably not willing to work at all, and he can stay in poverty indefinitely. While he stays poor, he can vote for people who will pretend to fund his lifestyle.

      • Blapartheid Zulu

        Exactly! Its so much easier to demand more for less than actually trying to increase more value for yourself.

      • Jon Low

        If he’s unskilled and lazy….

        (a) why did you hire him?
        (b) why don’t you train (upskill), equip and supervise him?

        Are you really a manager if you really can’t manage?

        • Well today I didn’t hire him, because he’s not just lazy and unskilled, but also too expensive. Take away “too expensive”, and maybe I’ll give him a chance. There’s no reason I should take a risk when he doesn’t.

          • Jon Low

            You can ensure he isn’t lazy and unskilled by drastically bucking up your recruitment-and-selection protocols. A management skill.

          • I can change a man by changing my protocols. Cool story bro.

          • Jon Low

            A man who is chosen after a thorough selection procedure which filters out the dross is far more likely to meet your needs than a man picked randomly off the street. A worker who is trained gives better work than one untrained. This is not rocket science.

            If you always do what you’ve always done, you’ll always get what you’ve always got.

        • Blapartheid Zulu

          That being said, that worker is not a slave, he has a choice whether he wants to be trained and improved. I’m pretty sure most people would be patience enough if the worker is willing to learn.

          • Jon Low

            If his progress is incentivised, he will be willing to be trained and improved. If a bookkeeper gets promotion for passing his Board exams, he’ll study hard to get there.

          • Jon Low

            The workers need incentivising to be willing to learn. That’s a management responsibility in providing those incentives.

      • Gardos

        Very sound logic Martin… and while that person continues to be paid a wage that isn’t enough to put food on the table and send their kids to school, South Africa will continue to suffer from the problems is suffers from now. The consequences of which do affect you. It’s a shame that, standing on the balcony of your ivory tower, you’re still so short sighted.

        • Mboweni says only the people in the towers should be allowed to work. I can see you in your tower. You’ll be fine with your income, until the unemployable hordes figure out how to topple it.

    • Blapartheid Zulu

      People are in poverty for a very good reason, give a man by the robot a job and see what he does with it. Even R10000 a month you won’t lift him out of poverty.

      • Jon Low

        Not unless you manage him properly in the job you’ve just given him. (Which begs the question, why did you ever just hire any random guy at the street-lights?)

        • Blapartheid Zulu

          Lol managed him properly, listen to yourself. Have you tried? They will disappear the next day when you try to “manage” them properly. We tried to help people, we thought starting at the streets with people looking for jobs would be a good start, clearly we were wrong.

          • Jon Low

            Yes, it’s a foolish way to do it. And if a worker would rather gap it than be supervised, it’s best that he gaps it as soon as possible.

            Decent pre-employment recruitment and selection will rule out hiring anyone who cannot work under supervision.

  • Dreigorian

    Ah yes africa way of doing things here, less work but demand more pay…you don’t pay more we strike…an endless cycle

    • Sennen Goroshi

      lol u keep saying the “the african” way in some of your post.. which way should be though? who do you know wants to work for less pay and be more productive?

      Slaves were productive with no pay but a whip to their backs… you want something similar to that.. pay less but be more productive?

      • yodaho

        Well that stands to reason since we live in Africa.

      • Blapartheid Zulu

        Yes, African way is the only way to go, it’s the only way to preserve natures environment

      • Nextlevel

        There’s nothing lol about the African Way, it’s pathetic just look around you and open your eyes

      • Jon Low

        The whipped slave was “managed” into being productive. And he/she had no choice. The modern wage-slave needs to be managed by means other than a whip — such as an incentive, a production bonus, an alert foreman who picks up on shirkers or people doing sub-standard work etc.

        A good manager spends R1 million on a mechanical shovel, requiring two workers for the two eight-hour shifts it operates. And he spends another million on training his 2 staff how to operate, maintain and repair it and their mobile floodlighting rig. He visits the worksite randomly, up to several times a day. The two digger-operators each earn doubke the minimum wage and get performance bonuses for exceeding quota.

        A bad manager spends R5000 on 50 spades. He pays his 50 shoveller-staff as little as the law allows and he doesn’t “waste” time on any overseers. He only works one eight-hour shift a day, because they can only dig in the daytime.

        Questions: Who digs the most ditches in the three months of the ditch-digging contract? Who earns the most money?

      • Dreigorian

        So you think a miner should be paid R 12 500 + medical aid + pension, while a nurse that “studied” medicine and are saving lives be paid less or even the same…like I said, the african way, you have already adopted it since I never said someone should be paid less and produce more, never stick to the context rather use a scapegoat, waiting for it….

        • Sennen Goroshi

          Funny you forgot to mention that miners actually work underground and risk their lives to enrich man in suits who sit in their nice cosy offices..

          but wait let’s pay them R3000 to R5000 a month coz they aren’t educated.. no medical aid even though they are at risk of developing some form of respiratory infection… let’s put education first and forget about the risks that face on a daily based.. if we think about that or say anything about it.. it will be labelled the “african way”… lol gtfoh man….

          I’m curious, which way would you have ppl in Africa adopt? the American way? Asian way? Australian way? European way? etc..

          according to you which “way” is actually better?

          • Dreigorian

            1st world country way, you do know that in other more developed countries mining is automated right? I know I know, ignorance is bliss, anyway, to get to the point, why study if you can make a lot of cash working in a mine, if cheap labor jobs paid the same as skilled educated jobs, will that not deprive education because why do I need it if I can get the same salary as someone that studied a 5 year degree…that is why I call it the africa way, but hey I can understand if you cannot process this logic.

          • Sennen Goroshi

            I always find ppl like you amusing..

            They have this condescending tone they believe they are of superior intellect simply because they see things differently from the next person..

            interesting you mention ignorance while you ignore the fact that I mentioned continents that also have that also have 3rd world countries.. “American way” (North and South) just thought I’d clear that out for in case you didn’t get it.. I was too lazy to separate the 2.

            is mining fully automated in the first world countries? just curious..

            miners are at the risk of losing their lives on a daily basis … that’s the part you seem to be missing.. they should be paid a decent salary and afforded at least medical aid.. because of the RISK they face.. unless otherwise you don’t think their lives are of any value.. education has nothing to do with it..

            you seem to put a lot of emphasis on education… so let’s do this.. Say you have a Receptionist who has a Matric certificate and a Miner who also has a Matric certificate..

            They each earn R8500 and R3000 respectively, the receptionist doesn’t work under life threatening conditions at the office and there’s no way to quantify her productivity in monetary terms. However the miner works under life threatening conditions and say he’s productivity makes the company around R500K a month… who do you think should be paid more? they have the same level of education yet work under different conditions… is the person whose life is constantly in danger or the one who is cosy behind the desk?

            By the way you still have not answered my question.. which way would you suggest is better exactly..

          • Dreigorian

            I’m in no way condescending nor do I have tunnel vision when having an argument, but the fact is that when you are intellectually superior you will come out on top, how do you think humans got to become the superior species on earth (Do some research) and why colonization took place so easily?

            What do you call a citizen of the USA? just curious since you ask. As for the automation, I can tell you they don’t need 1/100th of the labor used in sa per mine. You will always need an operator to handle the automation, but hey this surely is not the reason why sa is still stuck in the stone age right? job creation is a powerful thing especially when it’s obsolete.

            Please tell me how you got from a nurse to a receptionist, obviously you have no idea what the requirements are to become a nurse, hopefully I don’t ever go to a hospital where the nurses only have matric. So lets argue the following, how many receptionist does it take to do at least 20 different tasks a day? and how many miners does it take do do one task? I hope you get my drift, it’s more or less the same as the joke about changing the light bulb.

            As for the life threatening circumstances, there are jobs far more dangerous than a miner that gets less pay, as for your argument its irrelevant, that secretary is more likely to be killed on her way to work, hijacked or murdered than a mine collapsing.

            To come back to the original post, why do you think I said the african way? you know it’s a common trend in africa to strike or feel entitled to something, if you don’t get it, you destroy.

          • Sennen Goroshi

            Minimum requirement for most receptionist post that I have seen is a matric certificate, education level was a common denominator here.. seeing that minors too can have matric certificates… you placed emphasis on education.. so I created a hypothetical situation where the level of education is the same but the conditions are different…

            personally I’m not aware of the exact number of tasks receptionist or miners perform.. I also find the comparison of the number tasks be irrelevant.. seeing that one mining task might require more then one person in order for that task to be completed.. say moving a large rock and placing it in a cart.. while booking a meeting room requires just one person… the number of ppl required in each task might be different considering they are different tasks with different requirements.. which moving a rock is much more physically straining Vs booking a meeting room..

            so it would be nice if you had answered my question, whom do you think should be paid more of the 2.. the one whose life is constantly in danger or the one who is cosy in the office… seeing that they have the same level of education…

          • Dreigorian

            I was not comparing a person with metric with another, I was referring to someone that has a degree, and in that context have you yet to answer my question whether you deem it fair for those 2 to be paid the same? as for receptionist argument you are correct, professional one’s minimum requirements is matric, what is the percentage of miners that have matric? I’ll assume not many in my opinion since you would not require matric to work in a mine, I guess.

            What I was referring to regarding the “tasks” is that one crucial aspect, the job is obsolete, if you just take the automation in sa today compared to 10-20 years ago, it have taken away a lot of jobs already which brings me to my point, work that is very repetitive and does not require a high level of understanding and processing will in the end pay a lot less regardless of education level, that is why you get specific careers in the same domain such as IT, network admin, server admin, programmers, architects etc, none of them pays the same and in some cases one professional gets a lot more than the other.

            As for whomever needs to be paid more, it all depends on supply and demand, in my opinion the receptionist although I know of a few that get’s paid less than miners. And again, if we had a scenario where miners were limited due to certain factors, then by default miners would have been paid more than now, but since our country has such high unemployment it does not matter, the same applies to any other career.

          • Sennen Goroshi

            just read your first paragraph and will only answer it.. end of the day knocking off..
            No it’s not fair however such happens for example I was a senior developer with experience plus a varsity qualification yet a newbie boy with matric and a 6 months training got a permanent post and got paid more than me…

            I know this coz at the time of his hire I was actually working on an HR internal system so we had access to confindential information…
            at times education ain’t so important..

            anyway cheers mate have a good one.

          • Dreigorian

            That sucks, the same applies to miners, unfortunately the world does not owe anyone anything.

          • Sennen Goroshi

            true but for me I believe they deserve more than just R3000 a month as their lives are are in constant danger… if they make it out alive and retire they are still at risk of developing respiratory infections. We then complain about them not saving anything for their retirement when they can no longer take care of themselves..

            one can barely survive on R3000, there’s no way they can save anything.. Think about it man, just because they aren’t educated doesn’t mean they should be treated any less… I mean street sweepers earn more then them.. last I checked they made about R6500 which was a few years ago probably around R8k now..

          • Dreigorian

            I cannot think a street sweeper earns that amount, but I don’t know, don’t get me wrong I also agree that they should be paid more, but do you personally think paying them 12 500 and include medical aid is the way to go?

          • Sennen Goroshi

            Had a chat with a former class mate who was (maybe still is) a street sweeper in Durban CBD that how much they got paid back in 2012.. I was really surprised myself.

            R12 500 total package a month? if the medical aid premium will be deducted from that amount. But I don’t think it should be the case across the board, it should be based on experience though..

            at the very least they can make a decent living and maybe even move out of shacks that they live in…

            I mean their work contributes a lot to the countries economy… What do you think? based on the points that I have raised.

  • hairyback

    if you vote a thief into power, they will rule like a thief. Everything the ANC does is based on the principle of “taking from one and giving to another.” Every decision, every law, every half witted utterance out of a politician’s mouth is built on that foundation. BEE, Land grabs, nationalizing, E-tolls, unsustainable wage demands, a bloated cabinet and even more bloated cabinet ministers. The problem with this thinking is that there simply isn’t enough wealth to go around, and so the poor will remain poor, and only the connected few will get a lick of the cream at the top.
    They’re building on the wrong foundation. instead of “taking” their philosophy should be “empowering.” – “empowering the poor to become rich.” “empowering people to make their own way in life” That way they’d focus on education, entrepreneurship, competition in the market place. If you are a valuable asset, your employer will pay more to keep you. The ANC hasn’t yet learned that you cannot take wealth, you have to create it.

  • rouxenator

    France has some pretty strict minimum wage laws. It also has the highest unemployment rate for 20 to 30 year olds. If you make the wage too high then people simply won’t get jobs.

    • The minimum wage should be R0.00 per week. If people want to work for free, they should be FREE to do so. If they are not free to work for free, then they are not FREE.

      • Jon Low

        Slavery worked like that.

        • Ah yes, the collapse of the English economy after the industrial revolution. Yet they ruled the world from their little slum island.

          • Jon Low

            They abolished slavery before the full unleashing of the Industrial Revolution, but wage-slavery was equally pernicious. Out of those dark satanic mills grew a mighty force to dismantle it. They were called — wait for it — Trade Unions. Collective might of workers saw the introduction of thr 8 hour workday, paid annual leave, an end to child labour, safety-railings on moving machines, lunch and tea breaks and wages high enough to allow a family to live in a three bedroomed house, rather than to crowd into only one room.

          • Wiliam Wilberforce was not a trade unionist.

            When the demand for work grows, workers can form unions and negotiate a better deal. Here workers are FORCED BY LAW to demand more than their unskilled work is worth, and so demand for labour must decrease. We have hordes of people not working, because they are not allowed to work. Since they cannot work, they cannot become skilled. All they can do is rail against the satanic mills that they have dismantled and wonder why it’s all tea break and no income.

          • Jon Low

            Wilberforce lived at a time when unions didn’t exist. Exploitation of workers could take the form of outright slavery and indenture.

            Unions came about when workers realised they were weak as individuals but powerful as a collective in the power relations of employment.

          • While workers are politically strong, workers are economically weak as a collective force. They have dictatorial control of employment on a sinking ship. Politicians lie to the unemployed, but the unions sold them out.

          • Jon Low

            Workers would be utterly vulnerable to grotesque sweatshop-style exploitation if they operated individually and outside of any collective.

          • rouxenator

            A worker cannot be exploited – they can always quit. If life is too hard, well no one is forcing them to live. Do the honourable thing and stop living.

          • Jon Low

            Workers have “I quit” as one option. But it makes far more sense to have other options as well. Such as forcing improvements to their working conditions.

            When you go off on annual leave, or lie in bed on sick leave, you should reflect that this totally-unproductive behaviour is yours as of right. And the idea of paying staff to stay away from work — or to work only five days at 8 hours a day rather than 12 hrs daily for all seven — did not originate with the employers. It originated in the ranks of unionised employees.

          • rouxenator

            I am sorry, but it seems your focus is on unschooled or low level workers. Educated workers and those with skills that are in demand have the bargaining power to define what working conditions they are prepared to be bound to and also what compensation is fair. That is why their are no unions in such industries.
            If you are an unschooled or unskilled worker you need to realise that their are so many of you around that you have no choice but accept whatever work you can get. The problem here lies in the fact that this group of people breed at an alarming rate because it benefits the governments of the day. They have masses of poor people living off their handouts in return for the majority of votes.
            This may come across as a very harsh statement, but sadly it is true, their are too many of them and protecting them will only make it worse.

          • Jon Low

            Even unskilled workers have more than only the “I quit” option. Their collective numbers give them huge economic as well as political clout. The way they paralysed the platinum mining sector a year or so ago is ample proof of that.

            And they’re here — whether you like it or not. They’re a reality that everyone needs to accept. They are not going to slink away quietly and starve. And it wouldn’t make a blind bit of difference who happens to be the government of the day either. All those people mean all those votes.

          • rouxenator

            Again I agree, however the problem here is that all people have equal voting power while not nearly contributing to the economy on an even basis. For true democracy to work your voting contribution needs to be tied to your tax contribution. Most of the masses actually do not even contribute, they are a burden. Starving away or some other natural disaster might be the only way to stop it.

          • Jon Low

            There’s no democracy on the face of this planet where rich people have more votes than poor people. Such a system is known as a plutocracy. And, 500 or so years ago, much of the world ran as a plutocracy — we know it as the feudal system.

            Was it sustainable and thriving? Well, the rural peasants of France overthrew their feudal lords and King Louis XVI and put them all on the guillotine. And the urban proletariat of Russia put their plutocrats in a cellar of a house in Ekaterinberg and shot them all. And created a communist revolutionary regime. So it’s fair to say that plutocracies are far more unstable governments than democracies.

            When people are starving, they overthrow the old order — they don’t just quietly go off and vanish.

          • rouxenator

            Al I am saying it not fair that I pay for a regime that I did not choose.

          • Jon Low

            Of course it’s fair. The government of the day gets mandated by the votes cast by the majority of voters to impose taxes on ALL voters, as they see fit.

          • rouxenator

            True – but with such a small percentage of voters actually paying tax the systems is very unbalanced. This is because the government pays welfare which entices the poor to breed even more, thereby ensuring the government has a voter base in their pocket keeping them in control for ever. At the cost of a few hard working people that actually pay double, if not triple tax.

          • rouxenator

            But should those workers ever existed? Are the output they are producing to the GDP the same as what they take home? We need to go back to the rules of nature – survival of the fittest. If you make it easy for the weak to survive they will multiply at an alarming rate and everyone will be poorer.

          • Jon Low

            The survival of the fittest — aka Social Darwinism — means that the weak will gather in massive numbers to ward off the strong. Pilchards survive by shoaling, not by swimming off on their own. And the weak survive by their awesome ability to keep multiplying.

            To answer your “does their output match production” question, the answer is even simpler. Employers hire people to produce, not to give them wages for doing nothing much. If they all fail to produce more than what they’re worth, the company goes belly-up. Or else they are sacked for being a net loss to the enterprise.

            So workers DO produce more than their hire costs.

            SA per capita GDP stands at just a tad under US$7000 p.a. This calculates into about R100 000 for every man, woman and child in SA.

            Now consider that children, pensioners, prisoners, disabled people and all unemployed people should really be removed from the calculation as they are pretty much wholly unproductive. Then you’d find that the average WORKER contributes much, much more than R100 000 p.a — probably double that amount.

          • rouxenator

            The problem there is that you average it out across the population of the country. If you look at the percentage of people paying income tax VS the total population you get a much more accurate idea of where that GDP comes from. A small percentage is doing all the work and the rest live off it. Not sustainable.

          • Jon Low

            Income tax (PAYE) raises less than half the tax revenues of the country, so the PAYE-payers are really not such special sausages. Everyone pays taxes — VAT, fuel levies, surcharges, duties, excises etc.

          • 小杜 (xiao du)

            Suggest read the marvellous “who pays south africa’s taxes” on rollingalpha (google that phrase), and his followup piece “how south african indirect taxes are paid”.

            Tax payers are indeed special sausages – his meticulously explained conclusion is – “the net outcome is one in which most of the population receive more than they pay, and the main taxpayers pay a lot more than they receive.”

          • Jon Low

            A hobo buying a can of beans in a shop pays VAT on that purchase, and that makes him a taxpayer. A minibus taxi driver pays fuel levy on every litre of petrol he buys. He’s a taxpayer too.

            And all over the world taxation means that people must contribute according to their means and receive according to their needs. Tax is never designed as a personal savings fund where the more you pay in, the more you are entitled to draw out.

          • 小杜 (xiao du)

            Suggest read the links. The gist of it is that the tax payers do pay more than their fair share. The non-tax paying population’s share of tax (via vat etc) is miniscule.

            Our gini co-efficient is very very high – close to 0.7, from which you can infer that the gap between the rich and the poor is huge. Our middle class is shrinking, and the smart money is rapidly migrating out of the country.
            Our poor are numerous, and don’t really contribute tax-wise.

            What we should be doing as a society is reducing the reward incentive for overpopulation by stopping child subsidies past 1 child. Thats not going to happen, as the ANC wants more (black*) voters.

            *Generalizing somewhat, but the truth is that the majority of ANC voters are black. The colored and the white vote is going elsewhere.

            We have a massive population under 25 that hasn’t been educated (blame SADTU, and the ANC), has no future (ANC again), and the current generation of (mainly black adults) shouldn’t really have had the children they can’t afford in the first place.

            We’re already facing 30% unemployment (realistically this is closer to 45%), adding more non tax paying citizens on the already fairly minimal tax paying base is going to cripple whats left of the economy. We’re already facing the prospect of the interest on government loans rapidly leaping past taxable income, as the government spends with abandon, and increases the spending on government salaries using money they don’t have. It’s a train wreck thats already happened, we haven’t seen the full effects yet.
            ..and yet the government is still talking about pie in the sky spending on Nuclear and other things we can’t afford, and couldn’t afford even at R6 / dollar.
            The only hope for the country is massive curtailment of spending. A serious crackdown on corruption, and likely a new president so that the international markets have some measure of satisfaction that we’re not the mickey mouse republic that we are trying so hard to achieve full status of. While we’re at it, a ban on striking, and some serious action on remedying public security. We still have a military (barely), they should be assisting the police in cracking down hard on rioting, and burning things down, not just on assisting Herr Ramaphosa’s business related ventures a la Marikana

            Sadly, Gordhan et al haven’t made a hard a push towards the austerity measures we actually need, and the unions and SACP are railroading us into the precipice.
            The DA is ineffectual, and the EFF are populists with no care except taking whats left after the ANC has ravaged the economy.
            I fully expect that we’ll hit junk bond status come June.

            The smart money has left already. Welcome to Zim#2

          • Jon Low

            A child, once born, cannot be made unborn. Punishing the mother for bearing that child directly punishes an innocent baby.

          • 小杜 (xiao du)

            Where do I say anything about punishing a mother for bearing a child.

            I state –
            “What we should be doing as a society is reducing the reward incentive for overpopulation by stopping child subsidies past 1 child.”

            Incentivising childbirth is not the solution. The China method works reasonably well for that.
            The first child gets free healthcare, schooling etc.
            The second child gets none of that – the parents have to pay everything.
            Further children get you large tax fines.
            If you can pay the taxes, and afford to have children you can have them.

            Dis-incentivising is a good method to discourage rampant childbirth that the country cannot afford.
            Our current incentive scheme – more kids = more money is sheer idiocy.

          • Jon Low

            You do not have to SAY you’re punishing the mother — or the baby — by denying them the means of decent subsistence. It’s simply an unalterable and inescapable consequence of such a decision.

            Women get pregnant and have babies regardless of whether they have been incentivised to do so by a child welfare grant. It’s just Mother Nature at play.

            (China’s solution is feasible only in an undemocratic one-party state where there are no votes to be forfeited for your decree. In fact, if you have an illegal second child, you’ll get sterilised.

            And China is now re-thinking her one-child policy as it is well below the replacement maintenance level. There are now not enough younger people coming through, of good working-age, to support the swelling millions of elderly Chinese who are retired.)

          • rouxenator

            Ag that old story again – here’s the thing with VAT, fuel levies, surcharges, duties, excises etc. The people paying PAYE are paying far more VAT, fuel levies, surcharges, duties, excises than the poor people. That is because they have more income. So the VAT, fuel levies, surcharges, duties, excises from poor peoples are so small its negligible.

          • Jon Low

            It doesn’t matter, as you don’t get to withdraw your own tax input to spend of your own needs. PAYE contributes less than half the nation’s revenue.

          • rouxenator

            You are missing the point. The biggest portion of VAT gets paid by people that also pay PAYE. Because while poor people do pay VAT, they have so little money their contribution to VAT is almost nothing.

        • rouxenator

          Some people should not have been born. That is the problem here.

          • Jon Low

            They’re there — and you have to deal with this reality. Not wish it away.

          • rouxenator

            We can only improve it going forward, not change the past. We need to do something about the population rate of the poor.

          • Jon Low

            We can’t do a thing about the fertility rates of the poor. They have to do the reducing themselves. And what is the one proven way of reducing fertility rates in a democracy? Yes, it’s education. And raising standards of living and building aspirations.

            The Chinese one-party communist state “one-child” policy is not even an option. Mass sterilization would considered be an actual crime against humanity under international law, and there will be Nuremberg-style trials and severe penalties for anyone trying that.

          • rouxenator

            I agree on the education part. Yes sadly we sit in a country where the government at hand knows it is in their best interest to not educate masses and keep them poor. That why they do not ask questions, they breed very quickly and being poor they are dependant on the government to look after that. So basically we are stuck, and making labour laws more stringent will only make the masses poorer.

          • Jon Low

            Seeing as how the allocation in the budget dedicated to education is the single biggest allocation of all budget items, it is hard to buy the idea that the government is committed to keeping the voters uneducated. They could rather be spending that huge education budget on something more personally-enriching and cut it all off the education budget if that was their deliberate aim.

            If the unemployed masses had no fallback on social grants, they certainly wouldn’t be starving. They’d be stealing. On a massive scale.

          • rouxenator

            Wrong, look at the amount of pupils flocking to the Western Cape because the schools are better? What about the textbook scandals and the amount of power SADTU has? There are countless example of how the ruling party is trying to keep the masses dumb and unquestioning subjects.

          • Jon Low

            There is a big difference between an outcome and a design. The regime gets awful outcomes, but they are not there by design. They’re there because of huge incompetence in delivery.

            It’s like going swimming off Clifton in the icy-cold water. You may get hypothermia or pneumonia, but you didn’t go into the water with the deliberate intention to make yourself ill.

          • rouxenator

            You are missing the point, it is no conspiracy theory – the government deliberately wants the education system to keep pupils dumb.

      • rouxenator

        Correct, this is why some institutions have industry exposure and internship as part of their program.

    • Jon Low

      Not true. Measuring unemployment only for the under 30s is selectively skewing the stats to suit your case. Inexperienced youth always find getting a steady job harder than for jobseekers with 10-20 years’ of experience on their CV and who can do all that is asked of them straight from Day One without any time-consuming, productivity-sapping and expensive on-the-job training.

      Australia has the highest national minimum wage of all (ca. R30k a month) yet it has low unemployment at only 6%.

      • rouxenator

        BS. If you take the French unemployment and compare it to the rest of Europe, all in the 20 to 30 age group, you will see France has the highest rate. Why? Because of their bad labour laws.

        • Jon Low

          Not really — the French officially count all school-leavers attending college or university as “unemployed”. The Germans, the Dutch, the Italians, Belgians, Dutch etc. do not.

          • rouxenator

            The group bracket is 20 to 30. If you are nearing 30 you and still unemployed with a qualification it means you have most likely been post-grade unemployed for 7 or more years. Tough labour laws result in high unemployment and loss of foreign investment. Have a look at the IMF’s recommendations for South Africa.

          • Jon Low

            At 20-30 you will find relatively few students at the upper end of the bracket, but the vast majority of student youth will be contained inside the lower end — engaged in study. Few school-leavers in the tertiary sector will qualify by age 20. Almost all will still be proceeding with their studies at that age, and which is captured by the bracket.

          • rouxenator

            Did you notice the stats are for 20…… to 30?

          • Jon Low

            Yes, I did. And I pointed out the folly of the cohort, which has a wildly disproportionate distribution at the lower (more numerous) end.

          • rouxenator

            Let’s look outside the box then, compare the unemployment in that bracket for a country like France with one that has higher employment rates and you will see they do not have such poor and restrictive labour laws.

          • Jon Low

            Australia has only 6% unemployment, even though the labour laws forbid summary dismissal and compel a nationwide, all-sectors minimum wage of the equivalent of R30k a month, even for semi-literate, unskilled fruit-pickers, shelf-packers and burger-flippers. The companies which hire them nevertheless remain very profitable. There are no squatter camps. There are a raft of generously-funded social-welfare safety-nets for the unemployed and the unfortunates.

            There are plenty of jobs that need doing, obviously. In spite of high wages and strict labour laws.

          • rouxenator

            Yes – they are 1st world countries when the vast majority of people work and pay tax. We are a 3rd world country filled with free-loaders that just breed like crazy to get more welfare grants.

  • rouxenator

    They demand jobs, not work.

  • Nextlevel

    Ffs let the open market dictate the wages

    • Blapartheid Zulu

      That’s rocket science for th ANC

      • Nextlevel

        Yes hardly a matric amongst them

        • Jon Low

          Despite their awful performance in government, the ANC ranks have more MPs and MPLs who are in possession of bona-fide non-honorary masters degrees and Ph.Ds than all the other parties combined.

          PW Botha only had a matric.

          • Blapartheid Zulu

            Oh no I believe you, just look at all their cv! Everyone is apparently a master of everything in the ANC, just check SAA, SABC, ANC ministers, Eskom, and many more. They have more masters than the entire world combined, if you know what I mean.

          • Jon Low

            Don’t believe a CV. Check it out. Do due diligence. That’s what real managers do.

  • DaveL

    A major concern for these politicians should be how we make people productive in a coming environment in which menial jobs will be done by robots? Car driving (no taxis), home services (no domestic workers), electric cars (no petrol attendants, no mechanics), no waiters, no nurses assistants, etc. This may take a decade or so but that is only 2 terms for a political party. How does a warehouse picker compete with a robot that does the job 300% more efficiently, 5 times more accurately and at 100th of the cost?

    These concepts are very relevant for now. If most people worked at the efficiency they should, to get paid what unions think they are worth, there will not be anywhere enough work for all, unless these issues are addressed, re-engineer what humans do and train people to create wealth.

    There should be more effort spent on definiing new roles for humans and how wealth will be spread in the coming era.

    The current trend in many parts of the world is for less people to have full time work (that blows the monthly minimum wage out the window) and are working independantly on defined tasks. This needs training, systems and forethought. Are none of our politicians capable of addressing this NOW while we have just a little time?

    • Jon Low

      Train schoolkids on entrepreneurship and self-employment so they know how to start up their own businesses selling whatever they can supply to the market. Accounting, completing all the compliance paperwork, taxes, marketing, business etiquette, etc.

  • SouthAfricaFirst

    No worker should be forced to live in a shack. Salaries should be sufficient to afford a decent house, living expenses and education for your children.

    • Blapartheid Zulu

      no one is forced to live in a shack. I can’t be forced to drive a tata.

      • Jon Low

        You need to have enough wages to choose a better alternative than a shack.

        • Blapartheid Zulu

          You forgot to put in the magic word “earned” , nevertheless, you can not force someone to live in a shack. It’s a choice. If there aren’t enough choices, who’s running the country?

          • Jon Low

            You can upgrade from a shack if you’ve inherited, been gifted or even won the Lotto.

  • Blapartheid Zulu

    Demand demand demand …. That’s all these people can do. Demand a higher minimum wages, demand this and that, never thought about their own inputs and configurations.

  • Konstabel Koekemoer

    I agree with Mboweni, a single minimum wage will do more harm than good. If it is too high many jobs will be lost in the lower paying sectors while if it is too low you may find that workers in higher paying sectors will see their wages decrease. And it will als encourage more emploers not to register their workers which means they loose out on unemploment and IOD insurance.

    • SouthAfricaFirst

      Latest research show that higher minimum wages actually results in more job creation and economic growth as the middle class and spending power grows, facilitating greater economic growth.

  • Nofearorfavor aka Papas

    While I am not completely in the loop about the average monthly take home pay of most single parent women with a family all over the country, (correct me if I am wrong), I think on the lower end it is approx R4 000 – R4 500 p.m. and on the higher end, around R6K. So, much as any employer falling in the above category, would like to pay their domestic the new suggested minimum wage, it would not be possible.

    Daily many unemployed come to one’s gate, begging for work, willing to work for whatever a prospective employer can afford to pay them, as long as they have a job and some form of income, rather than no income at all. While I realize this could and does lead to exploitation of domestics, I feel that generally it does not, as on average single women households in particular, are struggling to make ends meet and employing a domestic under the minimum wage, at least provides some regular means to a domestic to put food on the table. If my assumption of take home income for single parent women with families is correct, a minimum wage, as suggested by Mr. Mboweni, surely could exacerbate unemployment of domestics, as these women (and there are many) will simply not be able to afford it.

    With our economy in huge doldrums and the forecast set to become worse, consumer goods and fuel prices shooting through the roof and literally rising week to week, unable to afford domestics, people will simply be forced to do their own housework, pay family or friends the wage they could afford to pay their domestic, to look after their children, or employ a domestic for only a few days per month, as many people are already forced to do.

    There must be another solution. If I remember correctly, in Mozambique for many years, the government did not enforce a minimum wage (don’t know if this has changed), but they had a different system and their rate of employment was excellent. I think wages were determined by net income of individual employers (whether business or residential). From what I remember, it worked in tandem with what individual employers could afford and because at the time, their unemployment rate was very high, people desperate, were content to at least have some regular income, which was monitored by the government.

  • SouthAfricaFirst

    Latest research going back 100 years is showing that higher minimum wages does not destroy jobs, but actually results in higher economic growth and more job creation as you middle class grows along with their spending power. Lets look at the economic facts and base opinions on solid economic research.

    • Jon Low

      An inconvenient truth.

  • JoeCitizen3

    Democracy …take it or starve…your choice….. something is better than nothing….

  • Kuga_ZA

    The problem is the government itself and the valuation of our currency. No matter how much you throw at someone, it will never be enough. I remember in the late 90’s when I was at primary school, I could get a 330ml can of Coke, a pie and a packet of chips for R10. You can pick one of those items now for R10, if you are lucky.

    • Jon Low

      In 1976 you could buy a brand-new car for R1600 and a three-bed brick and tile house with garage in a good suburb for R16000. On your salary of R160 a month. With mortgages charging 16% interest.

  • I agree with you sir Mboweni leave it to sectors to decide and so that it is fair within that sector where it is applied.

  • Jon Low

    “Tito Mboweni, a former governor of the South African Reserve Bank, says that no worker in South Africa should earn less than R3,000 per month”

    Well, then that is the natonal minimum wage, Tito. Simple. Sorted.

  • nickn4m3

    In principle, I agree with these guys. I think everybody should be able to earn a living wage.

    In reality though, garden services is cheaper than my current gardener. There is no way that I can afford to pay him that much. He feels he is very well taken care of and I view him as my charity project. When this goes through though, he becomes somebody else’s problem.

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