High minimum wage call is wrong gh gh

Zwelinzima Vavi, pictured, is calling for a minimum wage of R12 500 per month, but all this will do is increase the rate of unemployment and foreign investment.

The mind boggles at the complete lack of understanding of our unions and some politicians of basic “supply and demand”. High demand and low supply leads to high wages. Low demand and high supply leads to low wages – simple.

In South Africa, we have an ever-increasing supply of labour due to our high birth rate and the unskilled and semiskilled immigrants entering our country. The demand for labour is not increasing nearly as fast due to poor governance and the reckless statements made by some politicians.

Yes, there is a huge wage gap between those in top positions and those on the shop floor. The main reason is that there is high demand for certain skills that are in short supply. The reason our state-owned enterprises are in such a shambles is because those without the proper skills and integrity were employed in senior positions.

What we should do is follow China’s example. They have stabilised their population growth and increased the demand for their products worldwide. In fact, they are now outsourcing production to Indonesia. What our unions should do is focus on increasing the skills and efficiency of our workforce so as to create higher demand for our labour, instead of calling for less work and more pay to win support. One must start climbing a ladder from the bottom rung.