R20 minimum wage increase is not enough
Durban - The increase in the minimum wage to R20.76 an hour still represented “poverty wages” as the 3.8% increase would not make much difference in the lives of the poor.
This was according to Mervyn Abrahams, programme co-ordinator at the Pietermaritzburg Economic Justice and Dignity Group. He said the intention of the minimum wage was to bridge the gap between the highest- and lowest-paid workers.
Abrahams said the increase was below the inflation rate, which was in the region of 4%. For poor households, the inflation rate was even higher at 6%. “It leaves workers with less buying power in 2020 than in 2019 It maintains poverty wages. It is the only conclusion we can come to,” he said.
Abrahams said the Budget speech by Finance Minister Tito Mboweni on Wednesday should also be looked at. He said if the minister increased the fuel levy, it would have a ripple effect on prices across the economy.
The price of electricity was also another factor to be considered as the repercussions would affect everyone.
With the increases, which come into effect on March 1, the new minimum wage would be R3321.60 a month, while basic expenses like transport to work, electricity and a basket of nutritional food amounted to R4182.56 for the month of February, said Abrahams.
In terms of the increases, domestic workers would now earn R15.57 an hour and farmworkers R18.68 per hour. People who are part of the expanded public works programme would earn R11.42 an hour.
However, Melanie Veness, chief executive of the Pietermaritzburg and Midlands Chamber of Business, said the increases would not make the unemployment in South Africa any better. She said businesses were not doing well in the current economic climate and the increases would force them to make drastic decisions in terms of employment.
Veness said there could be unintended consequences of the increases and that South Africa had First World policies which did not reflect the situation in the country.
She said the increases came at the wrong time as they still needed to look at what the Budget speech held in store for business.