Gwede Mantashe
Gwede Mantashe

Minimum wage talks stalled

By AMY MUSGRAVE Time of article published May 25, 2016

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Talks on a national minimum wage for South Africa have effectively deadlocked at the National Economic, Development and Labour Council (Nedlac), dashing hopes of its implementation this year.

Now two of the four constituencies at Nedlac – labour and community – plan to declare a formal dispute.

Labour spokesman, Neil Coleman, told Independent Newspapers the dispute would allow for the constituencies to embark on a programme of protected mass action.

“It is highly regrettable that we have reached this point. The view of the Nedlac labour and community constituencies is that we now need to declare a formal dispute, if we are to break the deadlock,” said Coleman.

Labour, community, business and the government held talks for 18 months on introducing a minimum wage. At the moment only certain sectors such as domestic workers, farm workers, wholesale and retail, have a minimum wage known as a sectoral determination.

The national minimum wage was first mooted by the ANC in its 2014 general election manifesto. The party gave itself a five-year deadline to decide on its modalities.

However earlier this year senior party members, including ANC secretary-general, Gwede Mantashe, said the base pay would be implemented this year.

In March, Deputy President Cyril Ramaphosa said in Parliament that a “significant” announcement would be made on the wage in coming months.

But Coleman has painted a very different picture.

He said today that the labour and community constituencies had no choice but to embark on this course, describing the 18 months of negotiations as frustrating.

“Business has deployed the twin strategy of refusing to engage on critical matters, while using every trick in the book to delay and prolong discussions,” Coleman said.

He said the labour and community groups, which met earlier this month, had agreed that to make progress they needed to mobilise their constituencies in workplaces and communities.

“Therefore it was resolved to launch a national campaign, to demand the implementation of a meaningful national minimum wage,” Coleman said.

“It is totally unacceptable that it is now two years since the ruling party committed to implementing a national minimum wage, and there is little significant progress in the negotiations. Compare this to Germany, where the details of their national minimum wage were designed and implemented in little over a year from their ruling coalition making a commitment to introduce it.”

Many in the business lobby argue that introducing a floor wage would jeopardise existing jobs and price some work seekers out of the job market.

However, most international research on this topic shows no correlation between a national minimum wage and job losses. Studies suggest the inequality gap between the rich and the poor narrows as a result of a minimum wage.

While the government has not yet committed to an amount, it is likely to be in line with research from the Development Policy Research Unit at the University of Cape Town.

It has suggested two minimum wage scenarios to the state. The low-end scenario sets it at R2 477 a month and the high-end at R3 400. Both figures are lower than the R4 500 favoured by labour unions.

Business said if a minimum wage was introduced, it must be on par with the lowest sectoral determination of about R1 800 a month.

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