Dispute looming
After nearly 18 months, the labour and community constituencies in the National Economic Development & Labour Council (Nedlac) have declared that the national minimum wage talks have deadlocked.
The only way to break the deadlock is to declare a formal dispute, according to labour spokesman Neil Coleman.
“This will allow for us to embark on a programme of protected mass action.” Cosatu plans to launch a campaign to demand the rapid implementation of a “meaningful” minimum wage by mobilising workplaces and communities around the country.
“It is unacceptable that it is now two years since the ruling party committed to implementing a minimum wage and there is little significant progress in the negotiations,” says Coleman.
The parties have deadlocked, with Cosatu seeking a minimum wage of R4,250/month, business favouring R2,000/month and government R2,200/month.
Coleman accuses business of having refused to engage on critical matters “while using every trick in the book to delay and prolong discussions”. While business’s resistance was predictable, it is nevertheless “short-sighted”, he says.
“The extreme levels of worker poverty and wage inequality are causing conflict in the labour market. This is what the talks were intended to address.”
Business Unity SA CEO Khanyisile Kweyama says business is committed to the principle of a minimum wage “on the basis that it is set through a rigorous, evidence-based process to ensure that it does not result in job destruction”.
The level must be set with reference to social and economic factors, she adds. “This is not a simple task, particularly given the economic, social and employment challenges.”
SA is still reeling from the latest unemployment data revealing that 5.7m people are now unemployed — 26,7% of the working age population.
Nedlac’s job hasn’t been made any easier by the conflicting research produced by the universities of Wits and Cape Town (UCT). UCT’s research broadly suggests that a minimum wage will result in job losses if set too high and that this level will vary across sectors, firms and regions.
Wits stresses that, if correctly set, a minimum wage will almost certainly reduce poverty and inequality by raising the wages of the working poor while having only a “very slight” impact on employment.
The challenge for policymakers is to find that benign level where protection of workers’ wages is balanced against the need to prevent job losses and to encourage job creation by firms.
Government is likely to respond to the impasse by referring the matter to a body like the employment conditions commission within the labour department.