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Parliament approves national minimum wage bill

Workers will earn R3 500 a month.

Parliament passed a national minimum wage bill on Tuesday by an overwhelming majority, part of an effort by President Cyril Ramaphosa to tackle strikes and wage inequality.

The measure, opposed by the official Democratic Alliance (DA) opposition party, will see millions of workers earn R3 500 a month. It was initially meant to be introduced earlier in May in a bid to boost the economy.

The bill will be sent to parliament’s upper house for ratification and becomes law once it is signed by Ramaphosa.

Supporters of the minimum wage say it will reduce inequality and stimulate economic growth as workers spend more.

Critics say it could lead to increased unemployment, already at record highs, because some employers won’t be able to afford higher wage bills.

Labour Minister Mildred Oliphant said the bill could address the perennial wage inequality and poverty in South Africa.

“I am very pleased that the journey towards addressing the plight of the lowest paid workers in the labour market has reached this milestone,” Oliphant told parliament.

The minimum wage bill was one of a raft of labour-related bills passed by parliament and which has drawn criticism from some trade unions worried that policies aimed at preventing prolonged and violent strikes contained in the bills would dilute worker rights.

Thousands of union members protested against the proposed minimum wage in April, saying it was inadequate.

However, labour federation Cosatu, the country’s biggest union which is also part of the ruling alliance with the African National Congress, welcomed parliament’s decision.

“The minimum wage of R20 per hour will see the wages of 6.4 million South Africans rise. This is equal to 47% of workers and will directly benefit half the nation,” Matthew Parks, Cosatu’s parliamentary coordinator, said in a statement.

Others disagreed.

“Clearly this proposed wage will destroy jobs for the marginal workers and most certainly prevent their entrance into the economy,” said Michael Bagraim, the DA’s shadow labour minister during the debate.

More than two decades after the end of apartheid in 1994, South Africa’s economy is still characterised by deep wealth inequality between whites and blacks and high levels of unemployment.

Listen to the interview with Thembinkosi Mkalipi, of the Department of Labour, on the Classic Business Breakfast show here.

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A minimum wage is both good and bad for a country , it all depends how it affects you. As employer its not liked because even with an oversupply of cheap labour , the company wage bill will now increase . Unskilled employees will become unaffordable to some employers and those poor people will lose their jobs.I have however personally enjoyed the protection of a minimum wage , when i worked in France as a farm labourer for a gap year after completing my law degree . I was not in a position to negotiate a fair wage and was desperate for any job . Such an experience certainly changes how you view this complex issue .

“and was desperate for any job”

And this is where the moral hazzard comes in, you where lucky enough to find a employer, but lets say you didn’t, lets say you wanted to sell your labour to someone at a price you where comfortable with that was below the minimum wage, the fact is that it would be unlawful, I mean how ridiculous is that, you don’t even have the freedom of selling your labour at a price you may or may not be comfortable with, the government would rather have you unemployed than give you the freedom of choice.

Also a minimum wage almost acts as a bar then to employers, there is no after thought as to what low level workers are worth, it is then merely a matter of :”Oh whats the new minimum wage” ok that’s the new salaries we are going to dole out to low level workers instead of actually calculating their contributions and determining a fair value (which despite what trade unions would think would maybe even be above minimum wage for some positions)
Singapore has no minimum wage, and a very high per capita income.

If you value freedom the real question here is then : Does a minimum wage give me freedom or take it away?

Interesting that the DA decided to walk out of the National Assembly and not vote on this important bill which it stated it opposes. In the end only 17 votes were cast against the bill, presumably from EFF MPs. I think on the balance this will be good for SA, but time will tell.

COMMENT HELD FOR MODERATION
30 MAY 2018 @ 12:07 PM
The real tragedy is that in a country where a house in Cape Town can go for R100 million, and a few people earn hundreds of thousands of Rands a month, we need to pass laws to protect people that earn less than R3500 per month.

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