SA's Status

SA approves National Minimum Wage Bill: Is R20 an hour good enough?

We want to know if R20 ($1.43) an hour can sustain the hard-up families of this country

By Tom Head -

November 3, 2017

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Labour rights for South Africans look set to improve, following the government’s approval of the National Minimum Wage Bill.
The legislation introduces a blanket minimum payment structure for each and every South African in employment. It will serve as the legal backbone for workers who are at risk of being exploited for dangerously low sums of money.
November has heralded a step forward for trade unions and workers’ rights groups: As well as the National Minimum Wage Bill, Cabinet have also approved the Basic Conditions of Employment Amendment Bill and a Labour Relations Amendment Bill.
All three of these laws are expected to be implemented from 01 May 2018. Subject to a Parliamentary debate, the power now lies with Jacob Zuma. The President merely has to sign the documents into law.

What is the new National Minimum Wage?

• It’s set at a rate of R20 ($1.43) per hour
• For a 40-hour working week, workers can earn a monthly fee of R3 500. That figure rises to R3 900 for those who work a 45-hour week.
• Farm workers will get a minimum wage of R18 per hour – 90% of the national rate
• The minimum wage for domestic workers will be R15 per hour – 75% of the national rate
• Employees of expanded public works programmes will be guaranteed R11 per hour – 55% of the national rate

Could this be Cyril Ramaphosa’s legacy?

Some South Africans still see this as a wage only fit for ‘slave labour’. Many employees could be limited to as little as R160 a day. Try telling them that this is progressive…
(Users were responding to a Fin24 Twitter poll on the fairness of the NMWB)
The National Minimum Wage Bill is Cyril Ramaphosa’s baby. As a keen socialist and fervent supporter of trade unions, the Deputy President has worked hard to even get a national rate established. However, he had admitted back in March that this move is only to help ‘lay the foundations’:

“This will however improve the income of 50% of the working population’s income,” Ramaphosa said. “It will lay the foundation for progress towards a living wage for all. But what we have done in the meantime, is to set a floor below which no South African should ever be paid. We hope it will have an impact on income inequality and lift people out of income poverty.”

Ramaphosa also stated small businesses that couldn’t afford an upgrade to minimum wage would be given a 12-month exemption before being made to comply. However, any heavy-handed forcing through of this legislation could create more unemployment if businesses aren’t able to cope with the changes.

Can National Minimum Wage lift workers out of poverty?

More than 11 out of 20 South Africans live in poverty, at around 55.5% of the population. That’s an eye-watering figure of 30,000,000 people. For them, a line has to be drawn somewhere. But is R20 really high enough?
We’ve looked at two sources to determine just how viable a National Minimum Wage of R20p/h can be.

There’s a respectable number of citizens who will benefit from the changes. But with more mouths to feed, it’s not exactly ‘cut and dry’ (Stats SA)

Data from 2015, collated from Stats SA and presented by Cosatu as part of their arguments for a National Minimum Wage shows ‘poverty lines’ over recent years. ‘Food Poverty’ indicates extreme poverty, whereas ‘Upper-bound Poverty’ represents those who have just slipped into being poorer than poor.
Numbers in the chart reflect how much a South African must earn in Rand, per-dependant, to avoid poverty. For example, a worker with a family of four would need to earn R946 per person relying on his/her income. Including themselves, that would require a monthly salary of R4,730; this is way more than what the NMWB secures.

Single-income households remain vulnerable

By this year, the weekly wage needed to avoid extreme poverty went up from R400 to R441. By transferring that 10% increase to the Upper-bound poverty line, households would more than likely would need to earn R5,200 a month to avoid ‘poverty’ as defined by South African standards.
For single-income households, the National Minimum Wage Bill still doesn’t provide the protection required to keep a high number of families with their head above water.

The ball is in Ramaphosa’s court

There are inadequacies to the bill. But this is a passion project for Cyril Ramaphosa, and the first achievement on the long road to a transformed economy, that can boast true equality for all South Africans. He’ll have to keep businesses onside, and be prepared to make brave decisions to keep his vision on track.
In its current form, The National Minimum Wage Bill is an infant. However, it has all the right building blocks to become something more meaningful.
Given that Ramaphosa is still the favourite to lead the ANC