Friday, December 9, 2016
SA’s minimum wage determination

SA’s minimum wage determination


Johannesburg – South Africa’s national minimum wage level will be determined within the next three months, following concessions by parties at the National Economic Development and Labour Council (Nedlac).

A meeting between social partners and the Deputy President, Cyril Ramaphosa resolved to establish a panel of experts to “review, assess the impact and advise on the most feasible level”.

The decision follows a strike threat by labour and community constituencies if talks on the national minimum wage continued at a snail’s pace.

The groupings had complained that business was intransigent, while government failed to lead the process which is meant to be concluded this year.

However, ratings agency Fitch warned towards the end of last month against SA implementing populist measures such as introducing a minimum wage in the run up to local elections in August. Both Fitch and S&P rate SA’s debt as one notch above junk, although this could be dropped towards the end of the year if action is not taken to revive the economy.

“The authorities may see a need to react to the discontent about insufficient improvement to living standards by pushing costly social programmes,” Fitch MD Ed Parker told a banking conference in May, referring to the upcoming elections.

“Authorities may feel, if they have a poor showing, that there is a need for quick fixes like the introduction of a high minimum wage that would appear to help the poor but may also discourage investment,” he said via a prerecorded video.

Yet, Nedlac says in a statement that “the Deputy President said he had taken a lot of encouragement out of this process and expressed his confidence that an appropriate level and process would be agreed on soon”.

The meeting also discussed the progress made by the labour relations technical task team set to look into issues such as collective bargaining and industrial action.

The team comprising of representatives of the Nedlac social partners have to come up with “interventions to improve stability in the labour market.”