Deputy president Cyril Ramaphosa says that a panel of advisors on the national minimum wage has settled on a proposed figure which will be announced on Sunday 20 November.
Members of the National Economic Development and Labour Council are expected to meet on Sunday to receive a report from a panel of experts appointed by Ramaphosa to advise on an appropriate level at which the national minimum wage should be set.
“The report deals with what the minimum wage in the country should be … that proposal contains the figure‚ the magical figure that everybody has been waiting for. We will discuss it and we will then publicise it on Sunday‚” Ramaphosa said, as reported by Times Media.
The deputy president said that “the magical number” will help in settling labour issues, which is a key point of contention ratings agencies have with South Africa, which is putting the country at risk of a downgrade.
The minimum wage debate has been hotly contested in South Africa, as all sectors of society deliberate and debate over which level would be most acceptable. Some proposals have been modest (under R4,000 a month), while others have ventured more towards the unsustainable (R8,000 a month).
Approximately 60% of all South Africans 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.
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 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.
It is hoped that a national minimum wage will bring fairness to all workers in South Africa, and to settle the disruptive nature of strikes.
How much will the NMW be?
The lowest minimum wage that has been suggested to date is R3,500, with the National Development Economic and Labour Council (Nedlac) leaning towards a level of R3,700 in June 2016.
However, research conducted by Wits University earlier this year showed that the ‘optimal’ level for the minimum wage would be between R4,000 and R5,500. At this level, the net benefit to the economy would outweigh the job losses which would inevitably follow.
According to the Pietermaritzburg Agency for Community Social Action (Pacsa), to give workers a dignified life, with access to nutrient-rich food and utilities to meet basic needs (water, electricity), minimum wage should be set at R8,000 a month.
This is bearing in mind that this is the level a family of 5 to 7 people would need in a month to live, and that those who are employed will ultimately need to support those who are not.
Analysts have said the recommended minimum wage will likely be in the range of R3,500 to R4,500 per month.