Minimum wage – how was proposal made?



LOCAL OXFAM SA economic justice manager Ayabonga Cawe who was selected as a part of the National Economic Development and Labour Council (Nedlac) minimum wage panel recently spoke to The Rep on how they managed to arrive at the R3 500 decision.
“The analysis took into account international evidence, the macroeconomic impact and microeconomics of firm and household data. The terms of reference considered social partners such as business, labour, government and community in arriving at the proposed level.”
He said the main challenge was taking into consideration those who would be impacted by the decision.
“The national minimum wage aims to create a wage floor beneath which no worker should earn. However, if one considers that 47% of those employed in South Africa earn less than the proposed R20/hour, then there is a cruel irony at play.”
Cawe said employees in vulnerable sectors of domestic work, agriculture, security and cleaning could to lose jobs if the amount had been higher.
“We believe there are many options employers can take to avoid losing jobs, such as reducing hours and increasing productivity.”
At this point he said R3500 was a proposal tabled to the Committee of Principals at Nedlac, which would feed into the continuing negotiations.
“The progress on the nature of negotiations will determine whether there are any further matters to be looked at and whether the proposal will be adopted or not. At this point the matter sits with Nedlac as the social dialogue platform on key policy matters.”
Cawe said the proposed minimum wage was the start of creating a labour market that would prioritise the welfare and livelihoods of not only the poor but also address wage inequality by monitoring and regulating income differentials.

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