Cape Town - Stellenbosch University has warned MPs that the introduction of a national minimum wage could kill small companies and lead to job losses.
This follows a similar warning by UCT economists to the portfolio committee on labour last month.
The Stellenbosch warning came during deliberations and counter-claims by trade unionists in Parliament on Wednesday in the institution’s submission to the portfolio committee chaired by ANC MP Lumka Yengeni.
Numsa leaders disagreed, telling Stellenbosch economist Professor Neil Rankin his analysis was misplaced and the proposed minimum wage would not lead to job losses.
Rankin said the central bargaining system would be killed off by a minimum wage, and job losses would follow.
Evidence showed that the introduction of a minimum wage in agriculture had led to massive job losses.
In UCT’s submission last month, it said more than 100 000 jobs had been lost in the sector since the minimum wage came in.
While 819 000 people had been employed in agriculture in 2002, this had dropped to 623 000 the following year after the minimum wage was introduced. Jobs in agriculture further shrank to 555 000 by 2007.
Rankin said a 2012 study had shown that central bargaining agreements also contributed to job losses - between 8 percent to 13 percent of jobs, particularly in smaller companies.
Smaller firms involved in central bargaining councils facing high imports were likely to close shop, and would also be badly affected by a national minimum wage.
“The key question we have to answer is, are we using the right instruments for the right answers?
“If we raise the wages that people are paid we are not going to create jobs. The minimum wage falls on the people we want to create jobs for.”
Numsa parliamentary liaison officer Woody Auron said Rankin’s comments were reversing the gains made in the last 20 years to increase wages and improve workers’ conditions.
Last year’s quarterly labour force survey showed that 58 percent of employers decided on wages for their workers themselves.
“Even if there is a national minimum wage, that is not going to be the ceiling. National minimum wage is different from sectoral determination. You can’t take away workers’ rights for central bargaining,” Auron said.
Political Bureau