South African Government, plans to implement a national minimum wage. What does that mean and is it a good idea?
Support the call for a meaningful national minimum wage. We believe that the national minimum wage is an important tool in reducing inequality and working poverty, ills that plague our society and prevent a transition away from an apartheid-era existence for many millions in South Africa. A meaningful national minimum wage must cover all workers and provide enough for the basic needs of workers and their dependents to be met. A meaningful national minimum wage must contribute to a decent life for all and enable people to enjoy their right to dignity as guaranteed in the Constitution.
Many economists claim that a national minimum wage in South Africa will entail adverse consequences and inevitably leads to widespread job losses. These arguments offset possible gains from raising wage levels with ensuing rising unemployment in the country.
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.
The Wits School of Economic and Business Sciences has published a new research report on the minimum wage in South Africa, using international benchmarks to determine how much it should be.
The National Minimum Wage Research Initiative (NMW-RI) is an independent academic research project run by the Corporate Strategy and Industrial Development (CSID) Research Unit in the School of Economic and Business Sciences (SEBS) at the University of the Witwatersrand.
The contempt for evidence-based research in a recent article by Free Market Foundation director Eustace Davie “National minimum wage will hurt workers” is staggering. The polemic distorts (or ignores) the evidence, indulges in alarmist exaggeration and latches on to one unsubstantiated claim – that a national minimum wage will kill jobs and hurt the unemployed – and repeats, repeats, repeats.
‘The number of sectors to be excluded from a national minimum wage should be kept to the minimum, and while limited exemptions for businesses should be clear, they should come with strict enforcement, a symposium on the national minimum wage heard on Wednesday.’
“The institution of a national minimum wage in SA has the potential to raise the incomes of the poor, reduce inequality, and boost domestic spending, consumption, output and growth — all without a significant effect on employment.”
Gilad Isaacs is the coordinator of the National Minimum Wage Research Initiative and an economist at Corporate Strategy and Industrial Development, School of Economics and Business Sciences, University of the Witwatersrand.