The National Minimum Wage (NMW) Commission has issued a final call for interested members of the public, businesses and other stakeholders to submit comments and inputs on the potential changes to the rate for 2024
The deadline for comments and inputs over possible wage adjustments is Friday, 8 September 2023.
Also read: National minimum wage up by 9%. But soaring food costs means this is not enough, say unions
The NMW commission said the written comments/representations concerning potential changes to the national minimum wage will be considered by the commission before it publishes its annual report and recommendations on the annual review of the national minimum wage later in the year.
The current rate of the NMW, as announced by Employment and Labour Minister T.W Nxesi in February, jumped from R23.19 to R25.42 for each ordinary hour worked and was put into effect from 1 March 2023.
‘The NMW Act applies to all workers and their employers except members of the South African National Defence Force, the National Intelligence Agency and the South African Secret Service,’ noted the commission
‘The act does not apply to a volunteer, who is a person who performs work for another person and who does not receive or is not entitled to receive any remuneration for their service.’
Following 2023’s jump, there is no longer any difference between the minimum wages for general workers and the vulnerable sectors of farm workers and domestic workers.
Minimum wage increases have historically been done in consultation with various stakeholders and included considerations for the wider economy and the cost of living.
While these factors will still be at play, the commission has now explicitly linked the minimum wage to economic indicators such as the consumer price index (CPI) and the median wage level in South Africa, reported BusinessTech.
The minimum wage should increase at rates above inflation, so that wages grow in real terms and don’t lose value, the commission said.
Looking for a deal on a car, but tight on a budget? Have a look at these offers for under R100 000. View the deals here.
National Minimum Wage balancing act
The latest increase, announced in February, saw the national minimum wage hiked by 9.6% – even though annual inflation for 2023 was expected at around 6% at the time.
While unions and labourers welcomed the latest increase, employers and labour organisations were not as enthusiastic. This makes the cost of labour higher in a business environment already under pressure due to the prevailing economic conditions.
In response to the NMW Commission’s call for comment, youth development agency Afrika Tikkun Services called for labour and political leaders to focus on balancing minimum wage increases with their potential impacts on unemployment.
Even though the official unemployment rate decreased by 0.3% in the second quarter, there were still 200 000 job losses in some of the country’s major industries, reported IOL.
Onyi Nwaneri, chief executive of the agency which specialises in corporate transformation by connecting skilled black youths into the workplace, said significant wage increases could further discourage employers, specifically SMEs, from creating employment.
Nwaneri added that it is time to investigate the link between minimum wage and unemployment rates in South Africa where small annual increments to the NMW significantly impact businesses yet make little difference to how poor people are forced to live.
‘Increasing the minimum wage should be a balancing act that takes into account the need to reduce poverty and inequality considering high inflation rates, but still prevent a situation where small businesses, which are the backbone of the economy, can no longer afford labour costs.’
However, finding a balance between fair wages and employment opportunities is complex.
‘If we don’t find a balance between addressing economic challenges and the social impact of inflation, the problem we are trying to solve will remain a pipe dream – the triple problem of poverty, inequality and unemployment will remain,’ added Nwaneri.
To address concerns about NMW increases discouraging SMEs and job creation, Nwaneri proposed implementing minimum wage policies alongside other measures to support businesses by alleviating the burden on smaller enterprises while still ensuring fair wages.
Cape {town} Etc discount: Looking for things to do in the city at half the price? Let these great offers inspire you and fuel your imagination! Get them here.
Also read:
Motorists feel the pinch: Steep fuel price hikes confirmed for Wednesday
Picture: Sincerely Media / Unsplash