Raise national min­i­mum wage

Busi­ness will ask that the state pays for part of the national min­i­mum wage

CityPress - - Business - DEWALD VAN RENSBURG dewald.vrens­burg@city­press.co.za

Trade unions are push­ing for a num­ber of changes to the pro­posed national min­i­mum wage that would make it a far more mean­ing­ful in­ter­ven­tion – but still not a liv­ing wage. The unions’ main way to get a higher min­i­mum wage is by de­mand­ing the scrap­ping of a key fea­ture of the ex­pert panel’s re­port and its R20-per­hour pro­posal.

This is the so-called wage freeze, whereby the R20 only re­ally be­comes en­force­able in 2019, mak­ing the national min­i­mum wage in ef­fect R20 in 2019 terms. That is more like R17 an hour cur­rently. The point of this is to make the national min­i­mum wage segue pain­lessly with most of the ex­ist­ing sec­toral de­ter­mi­na­tions.

The panel’s pro­posal leads to few ac­tual wage in­creases across the most im­por­tant low-waged sec­tors such as do­mes­tic work, con­tract clean­ing, farm work, pri­vate se­cu­rity and hos­pi­tal­ity. The unions’ pro­posal changes that dra­mat­i­cally. They call for R20 an hour to be­come ef­fec­tive next year, and for it to in­crease by in­fla­tion plus 1 or 2 per­cent­age points a year from the start.

That means some­thing in the re­gion of R23 an hour by 2019.

Us­ing a fairly com­mon­place 45-hour work week, the unions’ pro­posal comes to R4 450 a month by 2019 in­stead of the R3 870 you get us­ing the panel’s pro­posal.

City Press has seen the labour re­sponse tabled at the National Eco­nomic De­vel­op­ment and Labour Coun­cil (Ned­lac), but un­der­stands that the busi­ness group at Ned­lac also wants a num­ber of changes that in­clude the state cough­ing up for the national min­i­mum wage in some “frag­ile” sec­tors.

This would be by us­ing the Em­ploy­ment Tax In­cen­tive (youth wage sub­sidy) to sub­sidise in­creased wages.

The law al­ready al­lows govern­ment to “des­ig­nate” sec­tors where the sub­sidy can then be claimed – even for older work­ers.

This mech­a­nism has not yet been used and busi­ness’ pro­posal would fur­ther en­trench the sub­sidy that it has al­ready fought hard to de­fend.

The youth wage sub­sidy has spec­tac­u­larly blown its ini­tial bud­get of R5 bil­lion over three years – it in­stead now costs at least R4 bil­lion in a sin­gle year.

Or­gan­ised busi­ness re­cently suc­ceeded in get­ting Trea­sury to back down from a plan to cap the Em­ploy­ment Tax In­cen­tive at R20 mil­lion per com­pany per year.

The busi­ness group in Ned­lac is also con­cerned about the ex­pert panel’s “prob­lem­atic” use of a 40-hour week as a base­line. The R20 wage be­comes the much-pub­li­cised R3 500 if you work on av­er­age 40 hours a week.

Ac­cord­ing to the head of the panel, Im­raan Valo­dia, the idea was to ex­ert down­ward pres­sure on the preva­lent prac­tice of the 45- or 48-hour weeks that are con­sid­ered nor­mal in many ser­vice sec­tors.

The most likely ad­just­ments em­ploy­ers will make is to in­crease wages and coun­ter­bal­ance that by re­duc­ing hours.

A source close to the talks says that the ex­pert panel’s pro­posal to im­ple­ment the national min­i­mum wage next year is con­sid­ered highly un­likely.

This is in part be­cause a new so­cioe­co­nomic im­pact assess­ment will prob­a­bly be con­ducted to es­ti­mate the po­ten­tial ef­fects on earn­ings and em­ploy­ment.

City Press un­der­stands that Ned­lac nev­er­the­less wants some­thing on the national min­i­mum wage as well as the new strike rules ready in time for the state of the na­tion ad­dress in Fe­bru­ary.


HANG IN THE BAL­ANCE Win­dow clean­ers hang on ropes as they clean win­dows at Me­dia Park in Jo­han­nes­burg

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