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South Africa might bring in higher wages

 South AfricaSouth Africa – South Africa’s Department of Employment has proposed a new target of minimum wage in the country in 2022. The National Minimum Wage Commission is responsible for assessing and reviewing the minimum wage annually, under National Minimum Wage (NMW) Act. After that, the minister of Employment and Labour, Thulas Nxesi, determines whether an adjustment is to be made based on the recommendations provided.

The government of South Africa has always maintained that increasing the national minimum wage can be instrumental in lifting more people in South Africa from poverty. But businesses have warned that doing so might prove to be a difficult avenue for businesses and lead to more job losses.

The most recent adjustment in minimum wage was introduced by Nxesi in March 2021, bringing the current total to R21.69 for every ordinary hour worked. The adjustment, however, is excluded for many worker groups, just as in previous years. These groups include:

  • Farmworkers are entitled to a minimum wage of R21.69 per hour
  • Domestic workers are entitled to a minimum wage of R19.09 per hour
  • Workers who are employed on an expanded public works programme are entitled to a minimum wage of R11.93 per hour

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It has been recommended by a majority of commissioners that the national minimum wage in South Africa must be increased by 1% above inflation, according to measurement by the consumer price index (CPI). On the other hand, a smaller group of commissioners recommended that the national minimum wage should be increased by 1.5% above inflation, as measured by the CPI.

National Minimum Wage Commission has noted that owing to pandemics, the real impact of wage adjustment might be unclear. Recent lootings in 2021 along with pandemic has already been detrimental to the economy and businesses in-country, and further wage increase might be catastrophic to them.

National Employers Association of South Africa said in an October report, “In a country such as South Africa, which is already struggling with unprecedented rates of unemployment, extreme poverty, over-burdened employers and business owners, and a veneer-thin trust in the government and its ability to care for its most vulnerable citizens, and unaffordable NMW will completely maim the already crippled economy, leaving employers, business owners, their employees and their dependents destitute.”