The Star reports that Deputy President Cyril Ramaphosa’s announcement this week on an approved national minimum wage (NMW) has sparked a debate about the effects it could have on employment levels.
The agreement signed by business representatives, government and labour federations, bar Cosatu, will be implemented by no later than 1 May 2018, with the NMW set at R20 an hour. But the Free Market Foundation (FMF) has come out against it, saying it would be detrimental for the unemployed and would lead to job losses. The FMF’s Eustace Davie commented: “You will see between now and May next year, employers are going to start filtering out people. People will lose their jobs, but quietly.” His views were countered by Gilad Issacs of Wits University’s NMW Research Initiative, who said the objective of a NMW was to reduce inequality and poverty among low-paid workers, and it was a fallacy that low wages lead to increased employment. He said the NMW would also be beneficial for the economy in terms of increased spending power by workers. Economist Dawie Roodt said he had no doubt that the minimum wage would add to unemployment.
- Read this report by Khaya Koko in full on page 2 of The Star of 10 February 2017
- See too, Minimum wage to boost spending power of millions, at TimesLive
Get other news reports at the SA Labour News home page