Unfavorable news for South Africa’s minimum wage
Unions strongly oppose workers’ calls for an increase in the minimum wage in South Africa. However, economists argue that there is a rationale behind these demands.
Workers in South Africa are calling for a rise in the minimum wage in response to the increasing cost of living. However, some unions say the proposed increase is completely out of touch with the economic reality of South Africa, reports Daily Investor.
The current minimum wage in South Africa is R27.5 per hour – or R5 050 per month – and this has been in effect since 2019. Sadly, while many economic factors are steadily improving under the GNU, residents are not seeing tangible benefits like lower prices for essential items at the tills. As a result, workers are calling on unions for the national wage to be increased three-times over, to R15 000 per month …
MINIMUM WAGE IN SOUTH AFRICA
However, the General Industries Workers Union of SA (GIWUSA) – a SAFTU-affiliate – has come out saying this demand is completely out of touch. Even though, “Inflation on basic necessities consistently outpaces wage growth. Therefore, the purchasing power of the national minimum wage in South Africa condemns residents to a life of permanent poverty,” says the union.
Moreover, GIWUSA says that current wage structures exacerbate economic inequality. “The gap between the wages and corporate earnings of executives is reaching unsustainable levels. As a result, the standard of living of workers has diminished substantially to new appalling lows,” explains the union.
SOUTH AFRICAN LIVING WAGE
As The South African previously reported, a University of Cape Town professor calculated that R15 000 is a sufficient living wage for the country’s lowest-earning workers. Financial services groups like Old Mutual and Santam, have pegged their minimum wage in South Africa to R15 000 per month. They hope that doing so could pressure other financial services providers to up their minimum wage, too.
However, renowned economist Dawie Roodt sees minimum wage in South Africa differently. He believes that an increase to the minimum wage in South Africa will prevent businesses from employing more people, thereby increasing unemployment (which sits at 41% of the available workforce). “The actual South African minimum wage is zero. If you do not have a job, you get exactly zero … that’s the minimum wage. The more unions push for a higher minimum wage, the more people will end up unemployed.