The minimum wage is a good start
It needs to be accompanied by a policy that restores dignity, overcomes apartheid structures and is linked to social security, writes Bheki Ntshalintshali
THE RECENTLY concluded National Minimum Wage (NMW) agreement at Nedlac represents a partial victory for the workers and also signifies the first step towards the attainment of a living wage.
The NMW is a product of an arduous struggle for a living wage by workers and their federation Cosatu, since the 1980s.
Sixty years ago the Freedom Charter called for a NMW as one of its key demands. The Freedom Charter stated that there shall be a 40-hour working week, national minimum wage, paid annual leave and sick leave for all workers, and maternity leave on full pay for all working mothers.
Workers have managed to defeat the fearmongering, untruths and outright propaganda by a well-funded lobby group that did everything to mislead the people and blackmail the government into abandoning the idea of a minimum wage.
This once again reinforces our perspective that unless the working class raises itself to a hegemonic position in key sites of power, and strengthens its capacity to mobilise and fight, the envisaged economic transformation will never happen.
The struggle for a living wage is a long and difficult one, which includes the struggle for affordable basic services, transport and food, and decent wages and working conditions. It will be achieved through only the collective power of workers.
The most recent developments in the country have reinforced the importance of a meaningful NMW. The recently released Labour Market Dynamics, published by Statistics SA, reveal that 50% of workers earned below R3 100 in 2015.
It reinforces the findings of the Wits NMW Research Initiative that more than 50% of full-time workers (or 5.5 million workers) earn wages that are too low to bring them and their dependants out of poverty.
This is what has motivated the federation to fight for the NMW, which needs to be pitched at a level where it is able to address this disgrace of working poverty, and the unacceptably high levels of wage inequality.
While the figure of R20 an hour falls short of the federation’s proposed figure of R4 500 a month and does not address the minimum living standards of an average household, it offers workers a decent starting salary base.
This will give workers building blocks to put together a solid foundation towards a living wage and will have a material impact on improving the wages of half the number of workers, or 6 million of our brutally exploited workers.
Many workers like farmworkers under the Food and Allied Workers Union, petrol attendants under the National Union of Metalworkers of South Africa, security guards under the South African Transport and Allied Workers Union, textile workers under the Southern African Clothing and Textile Workers’ Union, retail workers under the South African Commercial, Catering and Allied Workers Union and other non-unionised vulnerable workers will benefit immensely from this deal.
It is obvious that a NMW is not a silver bullet by itself. It needs to be combined with developmental labour market and economic policies.
A meaningful NMW needs to be accompanied by a new wage policy, which begins to recognise the dignity of every worker and overcomes the legacy of apartheid wage structures. We also need to ensure that it is linked to a plan to extend comprehensive social security.
It is indisputable that we inherited a legacy of an apartheid wage structure that was never addressed and that our economic system is not fully transformed. The ANC 2014 Manifesto proposed comprehensive collective bargaining, state incentives, employment equity and the NMW as a package of mechanisms to transform the wage structure in order to promote decent wages and decent work.
There have been some pessimistic voices that have argued that a legislated NMW will be bad for employers. But most studies have shown that adopting a minimum wage and paying workers better salaries in general makes businesses operate more efficiently and employees work harder than usual.
Higher and decent wages lead to more content employees, who remain with the business a little longer, and reduce staff turnover and training costs that go with hiring new employees.
Some have vehemently argued that a minimum wage will cost the economy jobs and raise unemployment levels. This is not supported by any hard evidence.
In the US, a study by banking giant Goldman Sachs of the 13 states which have raised their minimum wage, found that “the states where the minimum wage went up had faster employment growth than the states where the minimum wage remained at its 2013 level”.
Detailed research has been done by progressive researchers on the prospects for a NMW in South Africa. Labour in alliance with the community has placed detailed proposals on the table based on extensive analysis of the international experience, as well as detailed consideration of the South African wage structure and the conditions facing workers.
Cosatu is proud of the work done by labour, communities and other progressive NGOs to move the government and big business away from the ridiculously low level of R1 258 a month that they had previously proposed.
Credible institutions like Wits University have produced research that disproves the propaganda that the introduction of a R3 500 minimum wage will have major negative effects on the economy.
The idea behind the minimum wage is that it should make an effective contribution to a wage policy, which tackles the obscene levels of inequality prevalent in our wage structure.
Labour will ensure that the minimum wage will afford all workers a basic level of dignity and in its design and legislative formulation, we shall ensure that it supports and reinforces collective bargaining.
The huge task is to ensure that it counters potential abuse by employers, and legislate against the downward variation of existing agreements, which are higher than the NMW.
Cosatu is adamant that the NMW should be used as a springboard for a living wage campaign in all sectors.
The International Labour Organisation is clear that the objective of the minimum wage is to reduce poverty by establishing a generally applicable lower limit under which wages are not permitted to fall. The fixing of such a general minimum wages is normally associated with the view that all workers, as a matter of right, ought to receive protection against unacceptably low wages.
Cosatu will remain vigilant and shall continuously push to ensure that this starting figure is combined with a firmly agreed medium-term target and that there are decent above-inflation annual increases to progressively achieve this target.
There has to be some compliance mechanisms and effective sanctions in place to ensure that this NMW benefits the workers, otherwise it will be a meaningless exercise.
LONG OVERDUE: A woman wears a fake R200 note with the words “National Minimum Wage” printed on it during a Cosatu protest outside Parliament in October 2015. The National Minimum Wage is the product of an arduous struggle for a living wage by workers and its trade federation since the 1980s, says the writer.