Research has spoken: A national minimum wage is likely to boost the economy, decrease poverty and deliver numerous benefits overall. By Gilad Isaacs.
A national minimum wage in South Africa, if set at an appropriate and meaningful level, can reduce working poverty and inequality and support economic growth. This is the finding of a recent report by the National Minimum Wage Research Initiative at the University of the Witwatersrand.
By establishing a wage floor below which no employers are permitted to pay the employees covered, minimum wages are able to meet their central objectives as defined by the International Labour Organization of covering the basic needs of workers and their families.
South Africa has dire levels of working poverty: 54% of full-time employees — 5.5-million workers — earn below the working-poor line of R4,125 a month, and so cannot meet the most basic needs of themselves and their dependents. High dependency ratios mean wages in South Africa stretch to cover many dependents. Higher wages for low-wage workers would benefit both the employed and the unemployed.