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The majority of the members of the National Minimum Wage Commission have recommended that the minimum wage be raised from R20.76 per hour to R21.68 per hour.
This is an increase of 4.5%, 1.5 percentage points above the inflation rate of 3% per year in September.
Commissioners said that due to the impact of food prices, inflation was higher for low-income households. The effective rate of inflation for low-income households was 3.3% per year, they said.
They said that the current minimum wage is below the lowest poverty line of R3,360 a month for a household of four. This poverty line measures what is needed to cover food and some essential items such as housing.
Two out of five households in South Africa earn this or less, they said. At R21.76 per hour, the current monthly minimum is approximately R3,320 per month.
The majority opinion of the commission defended the increase in the minimum wage amid the economic recession of the Covid-19. “It seems unlikely that a modest real increase will exacerbate the recession and could help by working in conjunction with other measures to stimulate the economy,” they said.
In the majority view, “The initial investigation … found that the policy did not impose an undue burden on employers.”
South Africa’s minimum wage legislation currently discriminates against agricultural and domestic workers, as these workers may be paid less than the minimum wage.
The minimum wage for domestic workers is currently 75% of the minimum wage, while the minimum wage for agricultural workers is currently 90% of the minimum wage.
Most commissioners argued that the minimum wage for agricultural workers should be equated with the national minimum wage in the 2021 adjustment (an effective increase of R350 per month).
They said that wages for domestic workers should be raised to 88% of the national minimum by 2021 (about R19 per hour) and to parity by 2022.
They found that agricultural workers were not subject to the pressures that led to mass unemployment in other sectors, as their work was declared essential from the start of the Covid-19 crisis.
The majority opinion was supported by nine members of the commission. These were community representatives Tumelo Zwane, Conti Matlakala and Isobel Frye, labor representatives Trenton Elsley, Edward Thobejane, Solly Phetoe, and independent experts Dr. Sarah Mosoetsa, Professor Imraan Valodia, and Dr. Neva Makgetla. The president of the NMWC is Professor Adriaan van der Walt.
The minority opinion, from Jahni de Villiers, Jonathan Goldberg and Kaizer Moyane, representing companies, did not recommend an increase above the inflation rate. They wrote that, “any increase, in our opinion, will have an effect on job retention and creation.”
They also did not support the proposals on domestic and agricultural workers, arguing that “no sector can absorb such increases.” Instead, they advocated a four-year gradual transition period for farm and domestic workers.
“This is the only reasonable proposal to avoid the negative impacts of massive wage increases,” they said.
Under the National Minimum Wage Law, the National Minimum Wage Commission assesses and reviews the minimum wage annually. The Minister of Employment and Labor then determines an adjustment based on these recommendations.
Written representations to the commission on the 2021 adjustment can be sent to the Department of Employment and Labor no later than 30 days after November 20.
- By James Stent. This article was originally published by GroundUp, read the original here.
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