Mildred Oliphant is South Africa's Minister of Labour. Picture: GCIS

Cape Town - Labour Minister Mildred Oliphant says workers need to be paid decent wages to drive economic growth.

Speaking during her budget speech in Parliament on Thursday, she told MPs that at the risk of sounding too simplistic this made sense because our economy was largely consumer-driven.

“There is some truth that when workers earn a living wage, it means they have reasonable disposable income to spend on goods and services produced by the economy. If the demand on goods and services rises, the entire supply chain inevitably starts experiencing (an) increase in their output volumes resulting in direct and indirect positive social and economic spin-offs,” the minister said.

“Given that our economy is by and large consumer-led, the scenario painted above cannot be ignored.”

Business, the government and labour have been debating for years what constitutes a decent wage. While trade unions argue that in many cases workers’ salaries cannot cover food, electricity and transport costs, which continue to rise, there are some in business who if they have to pay decent wages, they would have to retrench staff.

Oliphant also used her speech to defend the country’s labour laws, which are often criticised by business as being too rigid and restrictive.

She said the point of labour legislation was to promote the minimum conditions to restore the dignity of workers, which was non-negotiable.

“It is correct that our labour laws set minimum conditions and our social partners are encouraged to do better. The principle that you cannot vary the minimum conditions downwards is important.

“We will celebrate a day when all employers were to stand up and say our workers enjoy working conditions that are way above the set minimum standards,” Oliphant said.

This year the Labour Department has a budget of R2,686-billion.

Labour Bureau