South Africa introduced a national minimum wage (NMW) in 2019 \u2013 however, as the figure has risen, so has outright non-compliance and the use of tactics like cutting work hours to get around the laws.<\/p>\n\n\n\n
This is according to a study conducted for the NMW Commission by academics from the University of Cape Town.<\/p>\n\n\n\n
The study examined the short-term effects of the NMW increase in March 2024 \u2013 the largest adjustment in real terms since the policy was first introduced.<\/p>\n\n\n\n
The minimum wage currently stands at R27.58 per hour, applicable to all workers. <\/p>\n\n\n\n
The National Employers Association of South Africa (NEASA) argues that the current economic climate makes it difficult for many employers to meet the minimum wage requirements. <\/p>\n\n\n\n
This is seen through the study, which found evidence of partial compliance.<\/p>\n\n\n\n
A subset of employers respond to the higher NMW by increasing wages, but not to the set level.<\/p>\n\n\n\n
Employers have also responded to the national minimum wage by reducing working hours.<\/p>\n\n\n\n
\u201cThe national minimum wage is a key progressive policy in South Africa, but it is also constrained by the country\u2019s economic environment, which limits what it can achieve in isolation,” read the report.<\/p>\n\n\n\n
“Relying too heavily on the national minimum wage as the primary tool for improving the economic welfare of workers does contain a level of inherent risk,” it added.<\/p>\n\n\n\n
The report noted that consistent above-inflation wage increases may not always be sustainable without trade-offs. <\/p>\n\n\n\n
In South Africa, concerns include potential negative impacts on employment growth and the risk of increased noncompliance, where higher minimum wages do not lead to proportional wage increases for workers.<\/p>\n\n\n\n