Talks around a South African national minimum wage have hit a deadlock, according to a report by IOL, with groups involved in the talks declaring a formal dispute.
Labour spokesperson Neil Coleman told IOL that the dispute would pave the way for protected mass action on the matter.
Deputy President Cyril Ramaphosa has been headlining the talks from government’s side, and said in March 2016 that he was confident an agreed rate would be reached.
He said that the national minimum wage needs to be set at a level that makes a meaningful difference in the lives of the lowest paid workers, while ensuring that economic growth and job creation can be sustained.
Talk surrounding a national minimum wage have been ongoing for the past 18 months, with hopes from government that it could be implemented by the end of 2016. These plans, however, are now on ice.
Getting the right number
A national minimum wage is a hot topic for worker representatives, politicians and businesses alike.
Former governor of the South African Reserve Bank, Tito Mboweni says that no worker in South Africa should earn less than R3,000 per month, but said that a national minimum wage was unnecessary, as the current system determines the minimum wage for every sector through collective bargaining.
However, there are sectors that are not represented in collective bargaining, and there is no minimum wage legislation that applies to all employees in South Africa.
The current 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.
Other groups – particularly business owners – say that setting a minimum wage will lead to job losses and tighter hiring.
Statistical modelling by Wits University’s National Minimum Wage Research initiative shows that setting the national minimum wage in the amount of between R3,500 and R6,000 per month will have a negligible detrimental effect on employment.