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National minimum wage may cut jobs
The ANC has pledged to investigate the introduction of a national minimum wage “as one of the key mechanisms to reduce income inequality”, but the proposal has been greeted with caution in business and political circles, reports Business Report.
There are arguments that setting a minimum wage will lead to job cuts and won’t create decent jobs.
While President Jacob Zuma gave the first indication that the ANC was toying with such an idea in his statement on 8 January, which took the form of an election manifesto at the weekend, Adcorp labour analyst Loane Sharp is of the opinion it is “most likely” that the minimum wage would be implemented, reports the news portal.
Sharp said that previous proposals in ANC manifestos, such as pledges about labour broking and affirmative action, had been implemented. “There is a high degree of confidence that the provision will therefore be implemented… but its effects on employment will be disastrous.”
Business Report noted that:
- In two economic sectors where wages had escalated ‘most dramatically’ - agriculture and mining - employment had fallen sharply.
- In agriculture, jobs had dropped from 2.1 million to 770 000 since 2001. A minimum wage regime on farms was implemented in the late 1990s.
- And while there was no legislated minimum monthly wage in the mining sector, there was an effective minimum wage as negotiated by the trade unions, Sharp said.
