NATIONAL MINIMUM WAGE
PUBLIC COMMENT CLEARLY FALLING ON DEAF EARS
It is quite ironic that the National Minimum Wage (NMW) Commission (‘the Commission’), in their 2024 Adjustment Proposal Report, “would like to sincerely thank employers, employees, community stakeholders and advocacy groups for their valuable contributions…”, as their recommendation, as per the norm, does not at all reflect the true sentiments of these stakeholders.
The majority of the respondents did not agree with an adjustment of the NMW in 2024. Three main themes were highlighted with regard to the Commission’s qualitative findings, including affordability, the state of the economy and corruption.
The qualitative findings of the report revealed the following:
“The qualitative findings of the report reveal that many employees also employ people in the home to help with caregiving and domestic matters. The concern arises that if the person working needs to hire a nanny or if an elderly person requires a helper in the house, they will not be able to hire at the set minimum wage as it is higher or equal to their salaries. This could result in job losses for the people who could have benefited from the small amounts they could have negotiated with their employers. Another recurring theme is that any wage is better than nothing. There is a concern that the national minimum wage takes away the employers’ and employees’ liberty to negotiate their wages. Instead, it increases the chances of unemployment.”
• State of the economy:
“There is a perception [that] the government has placed the responsibility of poverty eradication on the shoulders of businesses, despite seeing the deteriorating conditions of the country’s economy due to load shedding, high inflation, rising fuel prices and high unemployment. There is a concern that many businesses will eventually close down. There is also an outcry that, for many employers, the national minimum wage is unaffordable and puts businesses at risk of closing down.”
“The country’s high corruption rate is another contributing factor to the resistance against the national minimum wage. Several respondents felt that the government has failed its people and mismanaged funds that should have helped develop the country, and no accountability is observed. The focus is not on fixing their wrong but rather on enslaving employers.”
NEASA has always, in principle, objected to the notion of a national minimum wage. South Africa experiences a surplus of, especially, unskilled and low-skilled job seekers – caused by de-industrialisation and the failure of the education system. The unemployment crisis in South Africa requires an entirely different approach from the one which, until now, largely contributed towards unemployment.
The only measure through which this can be addressed, is to scrap the concept of a legislated national minimum wage in its entirety and rather to focus on education, the upskilling of the workforce and economic growth. When this is done, the free market will automatically compete for quality and skilled workers, which will organically drive up wages.
Even two unions, Solidarity and the National Union of Metalworkers of South Africa (NUMSA), recommend that the NMW be abolished. However, in a not-so-shocking turn of events, the Congress of South African Trade Unions (COSATU) proposed an increase of CPI by 3% in 2024.
The fundamental problem here is the ANC’s ideological delusions and its refusal to implement what is required to create a vibrant economy that provides for maximum employment. Although they preach ‘jobs for all’, every socialistic step they take is to the contrary.
On 11 September 2023, NEASA published a newsletter regarding the Commission’s request for public input, concluding that “Consequently, any input made to the Commission is simply a waste of time.”
From the Commission’s 2024 Proposed Adjustment Report, it is clear that despite NEASA, and numerous other stakeholders, annually performing in-depth research and submitting proof of the devastating effects of a legislated NMW, and any increase thereto, on employment and the economy of South Africa, the Commission proceeds with whatever would garner the most support for our failing, ruling party.
For more information
NEASA Media Department