Higher minimum wage makes it harder to hire locals in South Africa: union

Labour union Solidarity has called for South Africa’s minimum wage to be scrapped, warning that it could have the opposite of its intended effect and lead to jobs losses.

Employment and Labour minister Thulas Nxesi published the new minimum wage for South Africa on Monday (7 February), with the new figure set at R23.19 for each ordinary hour worked. This represents an increase of 6.9% from the minimum wage set in 2021 (R21.69).

“While the economy is still struggling to recover from the devastating impact of Covid-19 and the implementation of some of the most stringent lockdown measures in the world, it is absurd to increase our already irrational minimum wage by more than the inflation rate,” said Theuns du Buisson, economic researcher at the Solidarity Research Institute.

“The labour market is like a ladder that one climbs throughout your career. We would like everyone to reach the top of that ladder. However, the minimum wage does not propel anyone to a higher rung on the ladder. It only prevents those standing on the floor from getting the chance of climbing onto the bottom few rungs of the ladder.”

Solidarity has also warned that a higher minimum wage could lead to an increase in xenophobia and illegal labour practices in the country.

“The minister is making it increasingly expensive for employers to legally employ South Africans, which automatically creates an incentive for some employers to make use of the services of illegal immigrants instead.”

Solidarity said that by exempting itself from the provisions, the government itself demonstrates the counter-productiveness and harmfulness of the minimum wage.

“The state realises itself that the National Minimum Wage Act belongs in the trash bin in view of the fact that it does not apply to its own projects. Workers participating in the Extended Public Works Programme will only receive R12.75 per hour. Why do separate rules apply to the state on the one hand and to ordinary people and private businesses on the other?

“Surely it must be because the government realises that any job is better than no job, a reality that about a third of job seekers currently faces, and that the best route to a good job is to simply have any job to start with.”

Solidarity said that the best way to ensure better wages is to acquire better skills and to gain experience. “Regulations such as these will prevent people from gaining experience because there will now be even fewer jobs for new entrants to the labour market,” Du Buisson said.

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