Economy / 3 February 2016, 09:56am / Theto Mahlakoana and Zintle Mahlati
Johannesburg - Supporters of the national minimum wage in South Africa must be prepared for a battle because the wage will not be handed to them on a silver platter.
This is according to the Department of Social Development’s deputy DG Wiseman Magasela who referred to debates over the wage system as a political issue.
He was commenting on presentations made by experts and researchers at the Wits national minimum wage symposium yesterday, who pointed to initial hostility against the system in countries like the UK.
“This is, in my view, a political issue in the sense that just as much as we can deploy evidence, we can refer to research, so can the other side. However, what is important here is that those of us in government will need to generate policy arguments for the setting of the national minimum wage and this symposium becomes important in that regard,” said Magasela.
London School of Economics Professor Alan Manning said the UK had adopted a sectoral determinations system similar to that used in South Africa before the implementation of the national minimum wage in 1999, during former prime minister Tony Blair’s administration.
The system is today considered the best economic policy of the past 30 years in the UK.
While those championing the national minimum wage advanced arguments backed up by international research which indicated it had the potential to improve quality of life for workers, its opponents argued it would lead to job losses and disinvestment.
Studies presented at the symposium confirmed the system’s ability to alleviate poverty and inequality, but only if it were implemented along with social security.
Labour unions have been unsuccessfully pleading with government to implement some form of policy on social security plan for years.
The dispute escalated when labour unions refused to debate the newly enacted retirement reforms at the National Economic Development and Labour Council (Nedlac) in the absence of social security.
Manning warned that while effective, “it has to be used in conjunction with a set of other policies, such as welfare support for those out of work and in-work benefits for those in low-paid work”.
Magasela said government’s interest in the minimum wage was to address inequality and poverty, however it was faced with the challenge of a poor majority population.
He said, in devising the national minimum wage policy under consideration at Nedlac, stakeholders also had to take into account that, in SA, it was social grants and not wages that were the main driver in the fight against poverty.
A senior unionist told Independent Media on the sidelines of the symposium that discussions over national minimum wage at Nedlac were nowhere near reaching any sort of conclusion.
He said businesses were holding back on proposed amounts.