TWO KEY FEATURES
THINK IN TERMS OF HOURS
The proposed national minimum wage is R20 an hour. The 40-hour week, which hypothetically turns that into R3 500, is almost as important as the wage rate itself.
Professor Imraan Valodia, dean of the commerce, law and management faculty at the University of the Witwatersrand, has been involved with the insourcing of campus staff and says: “On average, if you are looking at the vulnerable sectors such as security guards and cleaning staff, all those kinds of sectoral determinations have very high working hours.
“The security guards at Wits work incredible hours, and they are happy the more you throw at them,” he said.
“In general, the impression is that people work too much. So, if you lift the hourly rate, you give them the scope to work less.
“We were thinking of people over the 45-hour threshold,” he adds.
The flip side of this is the significant proportion of South Africa’s workforce who work less than 40 hours a week.
“The question is whether there will be a big adjustment in their working hours that could lead to workers earning even less than they do now,” says Valodia.
“What will it be like for groups who only get a few hours’ work, not by choice? That would be part of the evidence we need to look at.”
A LITTLE INFLATION GOES A LONG WAY
Another important part of the proposed national minimum wage is what the R20 wage is in 2019 money terms.
A two-year period is proposed, during which everyone has to adjust to that hourly rate, which will not change until the transition is complete.
Today, that future R20 amounts to between R17 and R18, depending on the inflation rate one expects in the next two years.
Many of the lowest wage rates in the existing sectoral determinations will reach that level in the next two to three years anyway, making the shift to a national minimum wage imperceptible.
“That was part of the thinking,” admits Valodia.
“I think anyone who will be setting a sectoral determination in the near future is going to use this as a reference point.”
The proposed lower wages for farm workers and domestic workers are also seemingly designed to accommodate the trajectory on which their wages are already based (see table).
The private security industry is an outlier because it has relatively high “normal” hours of work and does not currently explicitly set wages in hour terms.
The lowest-paid guards have an hourly equivalent wage of about R15 currently, which will still be well below R20 by 2019 if adjusted by inflation.