Labour Law Conference to address impact of national minimum wage

The South African government has committed to introducing a national minimum wage but the detail is yet to be thrashed out. At present minimum wages are set in various specific sectors but there is no minimum wage legislation that applies to all employees in South Africa. This is a hotly contested topic and there is no doubt that the design and implementation of the national minimum wage legislation – and the level at which it set – will be crucial.

Some are convinced that the introduction of the national minimum wage will have a devastating effect on employment. However, statistical modelling by Wits University’s National Minimum Wage Research initiative shows that setting the national minimum wage of between R3500 and R6000 per month will have a negligible detrimental effect on employment. This research is borne out by the extensive international research in this regard conducted in both the developed and the developing world.

In South Africa, when minimum wages were introduced in the domestic worker and security guard sector, they did not have a negative impact of employment levels in those sectors. It is widely agreed that employees with the South African average of four dependants, who earn less than R4000 per month, are not able to lift themselves and their families above the poverty line and are referred to as ‘the working poor.’ Shockingly, over 40% of South African workers earn below this level. In the agricultural and domestic sectors, it is estimated that 90-95% of employees earn below this level.

South Africa one of most ‘unequal’ societies

Overwhelmingly, evidence shows that introducing national minimum wages contributes significantly to reducing inequality in society. Currently, South Africa is one of the most unequal countries in the world. On average, the top 10% of wage earners earn 24 times more than the bottom 10%, while the top 5% of the highest earners earn about 50% more than the bottom 5% of earners. This gap is widening at an alarming rate. In 2010, the gap between the top and bottom 5% earners was 20 times less than it is today.

Interestingly, wage differentials rather than unemployment are regarded as driving inequality. The latest figures show that unemployment is rife – particularly among the youth (18-25 years old), where the official rate of unemployment almost doubles to approximately 52%.

Trade unions discussed

At the conference, there will also be a detailed presentation on issues concerning the national minimum wage and the practicalities involved in its design and implementation. The conference will also tackle the question of how to reinvigorate social dialogue on these key issues between the social partners. This is especially important given the challenges that trade unions and trade union federations are facing in these uncertain times.

There will be two slots dealing with trade unions specifically - one entitled ‘The Role of Trade Unions in Recessionary Times’ and the other entitled ‘Challenges facing Trade Union Federations”.

For more information, www.annuallabourlawconference.co.za, call Erin on +27 (0)31 303 9852 or email az.oc.ocfnoc@nire.