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BusinessTech reports that trade union federation Cosatu has proposed a national minimum wage (NMW) increase of 8% for 2025, which the Democratic Alliance (DA) has warned risks increasing employment in SA.
Cosatu wants the NMW in 2025 to be increased by the average inflation rate plus 3%, in other words an estimate of 7.5% to 8.0%. DA spokesperson on employment and labour, Michael Bagraim, and the general secretary of Cosatu, Solly Phetoe, spoke to the SABC about their opposing views. Bagraim argued that since the introduction of the NMW in 2019, the situation has become far worse for low-wage workers and unemployed people in SA. Since its introduction, the NMW has not actually trickled down to the lowest-paid people in the country, he claimed. “What it has done is it kept more and more people out of the workplace.” Bagraim explained that small businesses in particular, which were the “engine room of job creation”, were negatively impacted by the NMW. As a result, they will choose to hire workers below the minimum wage and risk the consequences. Alternatively, small businesses may choose to outsource their work to people who aren’t paying wages at all, either through automation or by importing cheaper goods from places like China. However, despite the pushback, Phetoe made it clear that Cosatu would not change its stance on the NMW. He pointed out that the call for a NMW increase stemmed from the worsening economic crisis, rising poverty, inequality, and the high cost of living in SA. Phetoe stressed that the NMW has had a significant positive impact on workers. But, he emphasised that the NMW was not sufficient to meet basic living expenses and reiterated that Cosatu planned to launch a campaign for a living wage soon.
- Read the full original of the report in the above regard by Kirsten Minnaar at BusinessTech
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