Parties agree to a national minimum wage of R20 an hour: report

An agreement has been reached at the National Economic Development and Labour Council (Nedlac) on Monday (6 February) to officially institute a new national minimum wage, according to a report by BusinessDay (subscription required).

According to SA Labour News, the new national minimum wage of R20 per hour will be officially signed off on Tuesday, 7 February with President Jacob Zuma officially announcing the new wage at this state of the nation address on Thursday (9 February).

It will reportedly only be officially instituted as of May 2018.

It will then be reviewed annually by a new National Minimum Wage Commission with incentives being offered to sectors and employers who cannot meet the new wage requirements.

For someone working a 40 to 45 hour work week, this wage translates to R800 – R900 a week, or R3,200 – R3,600 a month.

The agreement will reportedly be accompanied by a “code of good practice for collective bargaining, industrial action and picketing”, as well as an “accord on collective bargaining and industrial action”.

Approximately 60% of all South Africans currently earn less than R3,000 a month – while the basic cost of living (survival line) for a family of four is over R5,500 a month so this proposed minimum wage could have a drastic impact on poorer South African lives and the economy.

It is also hoped that a national minimum wage will bring fairness to all workers in South Africa, and to settle the disruptive nature of strikes.

However, it’s not all good news. Economists have warned that setting any national minimum wage would likely lead to job losses – while other sectors have argued that the current system for determining wages suits the country better.

Minimum wages in South Africa are also currently determined by sector, or through bargaining councils led by unions. This has allowed more flexibility in setting worker pay, but has also led to the formation of predictable ‘strike seasons’, where workers down tools to negotiate new wages.

Read: How much money you should be earning in your 20s in 2017