Business Edge | South Africa’s New National Minimum Wage

On March 1, South Africa implemented a new national minimum wage policy, moving from 21.69 rands for every ordinary hour worked to 23.19 rands, representing an increase of 6.9%. The national minimum wage forms the minimum floor for wages in South Africa, meaning that every worker is entitled to the full figure and it is illegal for any employer of labour to pay anything less. South Africa’s new national minimum wage cannot be varied by contract, collective agreement or low; except in the agreement that the employment contract or low provides for a more favourable wage. It also excludes other payments of allowances, tools, transportation, food, accommodation, bonuses and tips. This new wage includes both domestic and farmworkers. To discuss this new national minimum wage in South Africa is on Business Edge is Trevor Shaku, the spokesperson of the South African Federation of Trade Union who is conversing with Tolulope Adeleru-Balogun is from the commercial capital city of Johannesburg.

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“There is a better improvement [compared to the past]. When you consider 2018 when the national minimum wage started, farmworkers had their minimum wage set at 15 rands per hour while domestic workers were at 13 rands,” Trevor Shaku says when asked about the recently revised figure, the third since the act making it the law was passed just over three years ago. He however points out that although it sets a good precedent that prevents unscrupulous employers from taking advantage of the vulnerable, the minimum wage is expected to also be a living wage, not below. That much, he says, that his federation pointed out in 2018 when the law was passed. To him, this is simply not enough, especially when put in the context of South Africa’s inequality and widespread unemployment.

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There also have been concerns expressed by analysts and economists that it might be difficult for small businesses to implement this change given the rocky state of South Africa’s economy. Trevor Shaku thinks it is now customary for the private sector to push back against new increases in the minimum wage, but it is a critical step to take.

Watch the full conversation above.

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