Amy Murphy
The National Minimum Wage Commission recently called for public comment on potential changes to the national minimum wage (NMW).
The commission will present its recommendations to Minister of Employment and Labour Nomakhosazana Meth to determine whether the NMW should be adjusted next year.
During the inaugural meeting of the Ministerial Committee, the minister said SA was facing the triple-threat of poverty, unemployment and inequality. Her department is facing an uphill battle in addressing the nation’s unemployment crisis.
The National Minimum Wage Act has existed since 2019 and aims to enhance economic development and social justice by increasing wages and improving the lives of the lowest paid.
The NMW is R27.58 an hour, following an 8.5% increase in March this year. Thus it is illegal to pay a full-time employee less than R4 412.80 a month.
The minister is empowered to adjust the NMW annually, after considering the recommendations of the commission. The act provides that the commission must promote NMW targets, aiming to alleviate poverty and reduce wage differentials and inequality.
Proponents argue that the NMW enhances economic justice by protecting vulnerable workers in low skilled jobs, such as farmworkers and domestic employees.
However, critics argue that increases in the NMW do more harm than good. It is suggested that the NMW acts as a barrier to employment as it overburdens businesses and disincentives the creation of low-skilled jobs.
However, Professor Heinrich Bohlmann, of the Department of Economics in the Faculty of Economic and Management Sciences at the University of Pretoria, argues that small real wage increases do not have a significant impact on employment. Thus, the NMW is the least of South Africa’s employment concerns.
South Africa has one of the worst unemployment figures in the world.
StatsSA reported that the unemployment rate had increased to just under 34% by June this year. The expanded definition sits at a staggering 43%.
Almost half of all young females are jobless, while unemployment among 15- to 24 year-olds sits is 59.7%. Journalist Adriaan Kruger said this meant one in four South Africans cannot find a job.
Moreover, South Africa is a young country. More than 27% of the population is younger than 15 years old, whereas people over 60 make up less than 10%. Thus, SA is barrelling towards an unemployment disaster as more youths are set to enter the workforce while the number of people who can afford to retire at 65 diminishes.
Busi Mavuso, CEO of Business Leadership SA, has explained that the business environment has been poisoned by crumbling infrastructure, energy supply challenges, shoddy governmental planning and corruption.
The consumer price index has reached a high of 115.90, and the cost of food has increased by 4.5%.
According to The Conversation, more than 20% of South Africans are food insecure. In these bleak economic times, South Africa is in dire need of job creation.
Addressing the unemployment rate provides immediate relief for the most vulnerable.
The NMW can serve as a key component of the strategy.
Although there might not be consensus on its precise benefits, the NMW is considered a valuable tool that can improve the lives of vulnerable workers and enhance economic justice.
As the country faces the harsh realities of rising unemployment, poverty and inequality, it is essential that the public actively participates in shaping policies that affect their livelihoods.
The upcoming review of the NMW provides an opportunity for citizens to voice their concerns, share their experiences and contribute to decisions that will impact the future of work in South Africa. Public participation is not just a right – it is a key instrument in ensuring that government policies are fair, effective and responsive to the needs of the people.
The commission will be receiving submissions from the public until September 30.
You can have your say on the national minimum wage at DearSA.
Every voice matters in shaping a future where dignity and fairness are at the heart of our nation’s labour policies.
* Murphy is a final year law student. She is an intern at DearSA.
Cape Times