Roundtable Discussion on a National Minimum Wage for South Africa

Category : PACSA news

Participants at the roundtable discussion

A round table discussion on A National Minimum Wage for South Africa was held on the 14th July 2015 in partnership with the Catholic Parliamentary Liaison Office (CPLO). Speakers included Eddie Cottle from the Labour Research Service, Gilard Isaacs and Bandile Ngidi from Wits University.  The speakers provided a historical background of the National Minimum Wage [NMW], debunked much of the arguments against it on the basis of evidence and clarified how it is being currently defined in the National Economic Development and Labour Council (NEDLAC), a statutory body that brings together government, organised labour, business and community-based organisations which collaborates on shaping economic policies.

Eddie Cottle Labour research service

The speakers provided a historical background of the National Minimum Wage [NMW], debunked much of the arguments against it on the basis of evidence and clarified how it is being currently defined in the National Economic Development and Labour Council (NEDLAC), a statutory body that brings together government, organized labour, business and community-based organizations which collaborates on shaping economic policies. The speakers also provided insights as to its possibilities of a national minimum wage being realized and the implications thereof. The arguments presented and subsequent discussions were extremely interesting.   Many of the arguments against the implementation of a NMW hinge on a understanding of the role of wages as directly impacting employment (higher wages = greater job losses). The speakers thoroughly debunked this theory. They suggested that factors determining employment levels are very complex. Output and investment are far more important than wages in determining employment levels. Wages are just one of numerous cost factors and become important only in that they can be controlled in the pursuit of greater profits. They suggested that capital has an obsession with wages, a strategy which they use to trick us into focusing all our attention on labour costs, and thereby ignoring all the other issues which are favourable to capital e.g. not restructuring the economy; not resolving apartheid wages etc.   The speakers further presented substantial empirical data which showed that where countries had implemented a NMW; that the impact on employment was almost neutral and the impact on poverty and inequality improved. Using case material from the recent Western Cape Farm Workers strike they also showed that employers had absorbed the 50% increase in farm workers’ wages to R105 won in 2013, and that employment levels in 2015 were the highest since 2003. The introduction of the higher minimum wage also had the effect of stabilizing employment.   An issue which caused a great amount of discussion was that the NMW is being defined narrowly in NEDLAC as a wage that seeks to increase the incomes of those at the bottom of the wage scale. Whilst important, given that wages in South Africa are extremely low; the NMW does not appear to be an instrument which would ensure that workers are able to support their families at a level of dignity. This made participants wonder whether the NMW framed within a neoliberal framework might simply be used as an instrument to manage discontent and reinforce capital. For some who had entered the round table imagining the NMW might be something of a panacea, the possibility of the NMW being framed so miserly and disconnected from our history of oppression and the apparent unwillingness to transform our economy, rankled.

BandileNgidiWits University

Suggestions are that the NMW will definitely be introduced in the near future (possibly before the next election) and that the level at which it will be set will be very low. In order to influence the final level passed, participants agreed that we need to get the NMW into the public domain – popularise the data, analyse it from our own experiences and escalate our social pressure on NEDLAC within what is extremely short deadlines.


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