Debating a Minimum Wage for South Africa

Category : PACSA news

The question of a minimum wage and the level at which such a minimum should be set is one of the most contested policy discussion in South Africa today. In order to explore this policy issue, Mervyn Abrahams (PACSA Director) together with Professor Nicoli Nattrass, University of Cape Town, and Mr. Terry Bell, labour journalist, made inputs at a roundtable discussion hosted by the CPLO in Cape Town.

Mervyn argued that a minimum wage, set at a level that approximates a living wage, is essential considering South Africa’s colonial and apartheid industrialization and the migrant labour system produced a working class characterised by very low-wages. The labour market has not been transformed, in any significant manner, since 1994 and this cheap labour system continues leading to an affordability crisis at household level, high rates of household debt and low economic growth. The median wage in South Africa in 2013 was R3033 per month and then 50% of all workers earned bellowed that median. In February 2015 PACSA’s research showed that a household of 7 persons required a minimum of R6688.00 to provide for the barest essentials and in most households there is only one wage earner.

We are caught up in a vicious cycle of low wages leading to poor nutrition at household level which in turns leads to low levels of economic productivity and skills deficits which in turn leads to low economic performance. We need to break out of this cycle and one means is a minimum wage set at a level that provides households to procure the basic necessities and begin to build the social base. While setting a minimum wage at this level might be challenging in the short term it does hold the best possibilities for long-term development.

He called for a social dialogue on ‘how’ such a minimum wage policy could be set but also encouraged those engaging in this debate to start from the premise: why do people go to work in the first place? Surely, to get the monetary means to provide for their household to live at a level of dignity. Can the minimum wage debate bring us to such a level?

To read further on PACSA’s contribution to the debate on the minimum wage see here Budget 2015 Factsheet.

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MAroundtable

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