Minimum wage has its benefits

INTERNATIONAL studies on a national minimum wage showed it alleviated poverty and decreased income inequality, said Wits university researchers who presented findings of studies conducted in more than 20 countries.

The academics expressed hope that when implemented in South Africa, it could have a positive affect on unemployment in the country.

A seminar hosted by the National Minimum Wage Research Initiative in Johannesburg yesterday explored international experiences.

“The evidence showed that the national minimum wage in SA can increase the wages for the low wage earners,” said Jana Mudronova, a researcher and PhD candidate at Wits.

She said inequality was driven by unemployment, the ability to access the labour market and by low wages. Since it was expected that a minimum wage would lead to an increase in salaries, a cumulative effect would be produced.

Nedlac, the government, labour and business negotiating chamber, is negotiating the introduction of a minimum wage and how it should be done.

It will need to consider such studies when suggesting to the government what should be done about policy formulation.

The researchers said the difference between countries that “get it right” and those that did not was the government’s attitude and determination towards minimum wages.

Wits senior lecturer Lotta Takala-Greenish said the wage was the “starting point to restructuring the economy”.