Why a minimum wage debate is irrelevant in SA right now

A minimum wage may provide some help for those who already have a job in South Africa – however, a minimum wage debate cannot ignore the 8.4 million unemployed people in the country.

This is according to DA shadow Minister of Labour, Ian Ollis MP, speaking during a debate on minimum wage in Parliament.

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

Currently, 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.

“Giving R300 or R400 extra to someone via a minimum wage might provide a little help for those who already have a job, while ignoring those 8.4 million South Africans who sit on the side of the road in Alexandra, Ekhuruleni or Mamelodi every day looking for work,” he said.

“The national minimum wage debate does exactly the wrong thing. It attempts to ease our consciences appearing to do something for the poor, when actually we are just making it more difficult for those 8.4 million unemployed people to get jobs, or just plain ignoring them completely.”

Ollis stressed that the DA is not against minimum wages, but it must be sector specific to curb job losses in marginal industries such as textiles and, more recently, steel, as well as those where rapid increases will lead to job losses such as agriculture, security services and domestic work.

Read: How much is minimum wage in South Africa?

Sectoral wages must be set by an independent Minimum Wage Commission, made up of experts in economics and international labour policy. “The risk of job losses from a National Minimum wage is immense,” Ollis said.

The DA believes that the youth and interns need to be exempt from minimum wages as well as workers applying for jobs in small and micro enterprises in order to help people with no experience get their first job.

Ollis said that the numbers around a minimum wage needs to be examined in order to create a reliable model of the demands that are thrown around by political parties.

The Economic Freedom Fighters (EFF), through its leader Julius Malema, has called for a national minimum wage, highlighting how much money the lower income jobs should be worth.

“At a National ‘one size fits all’ minimum wage of R4,500, which the EFF is demanding, research is indicating the potential for 1.6 million people to lose their jobs over a 3-year period.  This includes, 1.1 million youth – under the age of 24. This will push up the narrow unemployment rate from 25.5% to  over 33.3%,” the DA lead said.

Ollis noted that the EFF’s manifesto launched on 22 February 2014 wanted sectoral minimum wages for a host of different numbers for each sector: farmworkers R5,000, construction workers R7,000. Etc.

“Now today they want R4,500 for everyone, except Mineworkers at R12,500. Where is the research? Thumb sucking isn’t research,” he said.

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Why a minimum wage debate is irrelevant in SA right now