Minimum wage ‘a step towards income equality’
They hoped the wage increase would create a greater demand for goods and services
THE national minimum wage of R20 an hour, set to be implemented on May 1 next year, was not a living wage, but a step towards income equality in South Africa, Deputy President Cyril Ramaphosa said yesterday.
“This is a firm foundation of moving our country towards a living wage. It is a start. These agreements are the outcomes of nearly two years of deliberations,” Ramaphosa said while addressing journalists in Parliament on a set of agreements agreed to by the social partners at the National Economic Development and Labour Council (Nedlac).
Ramaphosa said the R20 an hour minimum wage would translate into a monthly salarly of R3 500 for those working a 40-hour week, and R3 900 for those working a 45-hour week.
The deputy president said the agreement – which had been signed by all Nedlac social partners – save Cosatu, which first has to report back to its central executive committee before signing on the dotted line, was a balancing act.
“We were seeking to balance the issue of increasing the wages of up to 6.6 millon workers (earning below R3 500 per month)…this wage could easily have been R20 000 (or0 R10 000.
“In doing so there would have been a negative impact where many workers would have lost their jobs through the introduction of an overly high minimum wage,” said Ramaphosa.
Employers of farmworkers and domestic workers will have a lead-in period of two years to bring the salaries in line with the R20 an hour wage increase.
Ramaphosa said businesses who could not afford the minimum wage would get a chance to plead their case.
“What we are saying is businesses should not opt for closure, reduction of hours, retrenching workers… we are saying assistance will be put in place for them to come forward and argue their case.”
The deputy president said the minimum wage was not a gamble, and they hoped that instead of job losses the wage increase would create a greater demand for goods and services.
“We had to start somewhere and if you like create a balance and even play it safe,” he said, adding he was expecting criticism. “It’s better to be criticised for doing something, than not be criticised for doing nothing.”
Ramaphosa said a commission would be set up to review the national minimum wage on an annual basis.
From now to May 1, 2018, the process of drafting and adopting the NMW Act, as well as amendments to relevant labour legislation would be undertaken.