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Mixed reactions to minimum wage

By Libuseng Nyaka

QWAQWA – The recent announcement on the increase of the national minimum wage from R25.42 per hour to R27.58 per hour made by Employment and Labour minister Thulas Nxesi on Monday February 5, 2024 has been greeted with mixed reactions in various quarters of society.

The increase from R25.42 to R27.58 per hour was published in the Government Gazette on Friday and will be effective from 1 March 2024.
Making the announcement, Nxesi said: “The minimum wage of 25.42 per hour will increase to 27.58 per hour, an increase of 8.5 percent. The National Minimum Wage determination also includes the vulnerable sectors of farm workers and the domestic workers – who since 2022 were aligned with the NMW rates.

However, the workers employed on an expanded public works programme are entitled to a minimum wage of R15,16 per hour [up] from R13,97. Workers who have concluded learnership agreements contemplated in section 17 of the Skills Development Act, 1998, are entitled to the allowances as determined in the latest government schedule.”

Free State secretary of Cosatu Monyatso Mahlatsi has hailed the increase of minimum wage from R2.42 to R27.58 which come into effect on March 1, 2024, describing it as much needed stimulus to economy.
“This increase helps protect value of the national minimum wage and workers ‘ability to take care of their families from inflation. It will inject badly needed stimulus into the economy and create jobs. It will provide relief to more than six million workers earning within range of minimum wage,” Mahlatsi said.

However, Textile factory owner Suren Ranjith differs saying with no jobs available this policy is a waste of time .
Ever since the NMW was introduced, unemployment rate has doubled. Industrial area has lost almost ten factories, losing a work force of 6500.In a nutshell, the figures speak for itself. Do we want a working South Africa or minimum wage , that sounds only attractive on paper.”

Echoing his sentiments ,Agri Eastern Cape says the 8.5 percent increase in the national minimum wage is out of touch with the economic realities experienced by businesses in South Africa.
The agricultural organisation says it believes that remuneration must be fair and reasonable, among others.
It says there is no way that above-inflation increases will not have a significant impact on employment within the sector.

“While the official unemployment rate approaches 40 percent, the real unemployment rate within many of our rural towns is probably closer to 65 percent”, Agri Eastern Cape said.
It says commercial farmers have had to absorb huge increases in production input costs, while product prices have not moved accordingly for some of the sectors.

FS Cosatu secretary Monyatso Mahlatsi.

Agri EC says although mechanisation and optimisation of resources is a worldwide trend, the increased cost of labour above inflation still needs to be factored in.
Meanwhile, AgriSA chief executive officer, Johann Kotzé says on the one hand, it has the potential to improve the spending power of households, but on the other hand, it could mean job losses, especially in smaller farm businesses.
He says many rural areas rely heavily on the sector for employment and economic stability.

“If farmers are forced to cut back on labour or scale down operations due to increased labour costs, it can have a ripple effect on local economies. Reduced farm incomes may lead to decreased spending in rural communities, affecting businesses that depend on agriculture-related activities such as equipment suppliers, food-processing plants, and transportation services”, Kotzé said.But
Additional information from Algoa FM