What the minimum wage pundits say

Internationally, the minimum wage is 40% to 50% of the national average wage, unions told the parliamentary portfolio committee on labour in June. But South Africa’s is less than 25%, according to a 2010 Organisation for Economic Co-operation and Development report.

Average earnings as reported in February 2014 were R14 731; 40% of which is R5 892.40.

Researchers Jeremy Seekings and Nicoli Nattrass used International Labour Organisation data to put South Africa’s minimum wages at 34% of the average wage in 2012.

“National minimum wages are obviously linked to the level of development of a country, so one would expect South African minimum wages to be lower than minimum wages in Brazil,” they wrote, arguing: “The minimum wage is 45% of gross domestic product per capita in Germany, and 32% in Brazil. In South Africa, the minimum wage of a domestic worker is marginally lower, at 31% of GDP per capita, but the average minimum set through sectoral determinations (R2 362 in 2014) was 40% of GDP per capita in 2014 ... If South Africa’s minimum wage was set (in 2014) at the same proportion of GDP per capita as Brazil, it would be R1 875; if it was set at the same proportion of GDP per capita as it is in Germany, it would be R2 636.”

Neil Coleman, of the labour federation Cosatu, said, “For us, it’s not the question of level. It’s the question of the principle … We accept there has to be a mediumterm strategy”, but it needed to be bolder than current sectoral determinations.

Coleman and Cosatu say South Africa has the most minimum wage schedules (124) compared to other African countries and this presented compliance and enforcement complications.

Seekings and Nattrass suggest that policymakers should look to the example of Mauritius in the 1970s: it prioritised low-wage job creation to address unemployment. “It was only once the labour market had tightened that statutory minimum wages were raised because policymakers wanted to ensure there would be no job destruction,” they said.