A report by the National Minimum Wage Research Initiative at the University of the Witwatersrand is promoting a minimum wage in South Africa.<\/p>\n
According to the report, establishing a national minimum wage can be instrumental in reducing the inequality gap and poverty, and can support economic growth.<\/p>\n
The National Minimum Wage for South Africa report shows that the level of economic output would be 2.1% higher with a national minimum wage, beginning at levels between R3,500 and R4,600.<\/p>\n
The research claims that a minimum wage can be implemented without significant employment effects.<\/p>\n
Speaking on Business Day TV<\/strong><\/a>, Dawie Roodt, Chief Economist at Efficient Group, disputed the findings, arguing that a minimum wage will lead to job losses and increased poverty in South Africa.<\/p>\n Roodt said moving money from \u201cbad capitalists\u201d to give it to workers who will spend more to stimulate the economy is a bad idea.<\/p>\n This approach is a way to stimulate demand in the economy, which is not needed. \u201cI would argue that we do not need stronger demand in the economy,\u201d he said.<\/p>\n \u201cWe have excessive demand in South Africa, which is shown by the country\u2019s very large current account deficit,\u201d said Roodt.<\/p>\n Roodt said if you take money away from capitalists, or the so-called hoarders, it will lead to lower savings and higher interest rates. This is not good for the economy.<\/p>\n Roodt also dismissed the argument that a minimum wage will decrease inequality. He said the reason for inequality in South Africa is because so many people are unemployed.<\/p>\n Another reason is the fact that the state is a large employer, and that it overpays its employees.<\/p>\n Roodt was adamant that a minimum wage will increase unemployment.<\/p>\n \u201cA minimum wage of R4,000 will lead to huge levels of unemployment, which the country simply cannot afford,\u201d said Roodt.<\/p>\n The report suggested that higher salaries also lead to higher productivity by workers, which compensates businesses for the higher costs.<\/p>\n Roodt said this is not true. He said a major reason for low productivity in South Africa was the \u201cterrible state of our education system\u201d.<\/p>\n \u201cIf you want to improve productivity levels, improve education and skills development in South Africa,\u201d said Roodt.<\/p>\n He said businesses would love to pay their workers more, as long as this was accompanied by higher productivity.<\/p>\n \u201cUnless you improve education, you are simply not going to get higher productivity and higher wages.\u201d<\/p>\n Pacsa says you should pay your domestic worker R8,000 a month \u2013 minimum<\/a><\/strong><\/p>\n This is how many domestic workers in South Africa have lost their jobs in 2016<\/a><\/strong><\/p>\n What you need to know about minimum wage in South Africa<\/a><\/strong><\/p>\nDebate on productivity<\/h3>\n
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