Zero minimum wage equals maximum shame
Business is serving its own interests at the expense of the country by stalling on fair pay, writes Angelo Louw
THE introduction of a national minimum wage is a contentious issue that has been repeatedly delayed by a narrow focus on its potential impact on company bottom lines; but, as long as the country stalls on implementation, it digs itself deeper into despair.
As demonstrated in a 2015 working paper by the National Minimum Wage Research Initiative at the University of the Witwatersrand, the wage gap between poor and non-poor workers reinforces socioeconomic inequality. An analysis of the 2013 National Income Dynamics Study found that the average non-poor earner supports one other person financially whereas poor earners have a higher ratio of 2.65 people. This implies dependants of low-wage workers have little hope of escaping poverty because of limited resources, and that more people are likely to find themselves living below the breadline.
A national minimum wage is not the silver bullet that will address poverty and inequality in South Africa. It is, however, a proven means of addressing social injustice by closing the inequality gap and a significant step towards achieving a decent living level for all.
Criticism of the minimum wage is fierce, with politicians and business alike raising concerns around the potential negative consequences that they perceive will follow such a shift in policy, particularly layoffs of unskilled labour by businesses to counter the financial implications.
The director of the Free Market Foundation, Jasson Urbach, wrote in a recent Business Day opinion piece that “when the price of labour goes up to such an extent, the demand for it will go down”. He said that because of this, the most principled case against the minimum wage is that it is “morally wrong”. However, such a stance on the proposal is grossly misguided as it is the reluctance of business to invest in the economic wellbeing of their workers that is morally deprived.
That we are still unable to persuade South African business to partner with us in the pursuit of a decent living level for all nearly a year after negotiations were meant to conclude, is not surprising. Too many business leaders remain guided by an outdated business ethic rooted in our colonial past.
Patrice Lumumba, the first legally elected prime minister of the Democratic Republic of Congo, famously said: “The colonists care nothing for Africa for her own sake. They are attracted by African riches and their actions are guided by the desire to preserve their interests in Africa against the wishes of the African people. For the colonists, all means are good if they help them possess these riches.”
We cannot continue to allow business to violate the human rights of the vast majority of people in this country. Deputy President Cyril Ramaphosa’s attempts to sweet-talk business . . . on the premise that the minimum wage will increase spending power and stimulate economic growth . . . afford business too much influence over our country’s future.
Meanwhile, the long-awaited ratification by the government of the International Covenant on Economic, Social and Cultural Rights in April last year enshrined the right to work in South Africa as well as the right of everyone to just and favourable conditions of work. This includes the requirement that the government take steps to ensure that workers receive fair wages. Countries like Germany have gone as far as to criminalise non-adherence to legislation that guarantees a national minimum wage. What’s stopping us implementing similar measures?
On Workers Day we pay our respects to those who have built our country. Few appreciated their sacrifices more than the former leader of the SACP, Chris Hani, whose words at the ANC Morogoro conference in 1969 continue to resonate.
“Our nationalism must not . . . be confused with the classical drive by an elitist group among the oppressed people to gain ascendancy so they can replace the oppressor in the exploitation of the masses,” he said.
“Victory must embrace more than formal political democracy. To allow the existing economic forces to retain their interests intact is to feed the root of racial supremacy and does not represent even the shadow of liberation.”
Louw is the advocacy officer at Studies in Poverty and Inequality Institute, a South African think-tank specialising in research and analysis of poverty in sub-Saharan Africa.
Germany has criminalised non-adherence to minimum wage legislation