A minimum victory

There was something ironic about this week’s signing by all the social partners — except Cosatu — of the new accord on the national minimum wage. It was, after all, Cosatu which had long pushed for a national minimum wage, mooting it for the first time ahead of its 2012 national conference.

The trade union federation’s last-minute decision to hold back from signing therefore looked like a classic case of snatching defeat from the jaws of victory.

The excuse offered by the Cosatu negotiators was that they needed time to consult with the federation’s central executive committee — a somewhat weak excuse given that there is provision for special sittings of the committee if urgent mandates are needed.

This is not the first time the federation has balked at the last minute. The release of the report of the national minimum wage committee by Deputy President Cyril Ramaphosa at Nedlac last year was delayed because Cosatu didn’t want it made public at all.

The timid approach to signing on the dotted line is clearly a reflection of the ailing state of Cosatu’s leadership generally, as well as of the internal factionalism.

Some insiders see the last-minute pullback as an attempt by those within the federation backing President Jacob Zuma to deprive Ramaphosa of the glory he was due as leader of the national minimum wage task team. If it was, it also had the presumably undesirable effect of robbing Zuma of the chance to claim the wage pact as a victory during his state of the nation address. All of which tends to suggest just how much of a shambles Cosatu’s leadership is in.

With or without the federation, however, the national minimum wage of R20 an hour is set to be implemented from next year.

It’s worth mentioning that this isn’t necessarily the R3,500 a month that has tended to be highlighted — many people work much longer hours than the 40 hours on which that calculation is based, and the number is likely to be closer to R4,000 for full-time workers.

That’s still a very low number for many — Cosatu included — to stomach. But it has the potential to make a significant difference to the lives of the 6.6-million workers who are estimated to earn less than R3,500 a month. It is a start, at least, to addressing the problem of working poverty as well as to narrowing the income inequality gap.

The designers of the new minimum wage have taken into account the needs of some more vulnerable low-paid sectors, building in a tiered approach which sets lower minima for agriculture and domestic work, at least in the initial years. The plan is for a phased implementation whose impact will be carefully monitored.

Yet there remain big questions over what the new national minimum wage regime will do to employment in a country with an unemployment rate of 27%.

Big business can certainly live with R20 an hour, and indeed the set of agreements that have been reached by business, the government and labour at Nedlac on labour stability and the national minimum wage have been largely welcomed by investors and ratings agencies as a step on the path to a more stable labour relations environment.

But how easily will small businesses and entrepreneurial startups that SA needs live with the new minimum wage?

There will be provision for “fragile sectors” to apply for exemptions of up to 12 months, as well as for assistance through incentive programmes.

But we had better hope the new national minimum wage commission is vigilant in ensuring the scheme is implemented in a thoughtful way and that any job losses are mitigated.

THIS IS NOT THE FIRST TIME THE FEDERATION HAS BALKED AT THE LAST MINUTE