New Minimum Wage System in South Africa

Topics: Minimum wage, Employment, Wage Pages: 7 (2577 words) Published: June 5, 2013
1 OBJECTIVE
The objective of this memorandum is to provide the minister of Labour Mrs Mildred Oliphant with the generic implications of the increased minimum wage in the agricultural sector which was implemented because of the wild-cat strikes which hit the agricultural sector in the Western Cape during December 2012. This memorandum is drafted with the intention that minister of labour completely reassesses the increase in the minimum wage because of the possible implications it may have on the South African economy during these tough economic times in the world and the minister should consider creating a National Minimum Wage Model that ensure that generic implications of the policy does not result in chaos. The memorandum will provide the minister with policy improvement alternatives to assist the minister and her department improve the current minimum wage policy that many experts believe may have unpleasant consequences on the well-being of the economy. The memorandum will also provide a list, in the form of a template adopted from Cloete and Coning (2011), consisting advantages and disadvantages of the minimum wage in the following sectors; the political sector, socio-economic sector and environmental sector, financial sector and institutional/organisational sectors. 2 BACKGROUND OF THE MINIMUM WAGES IN SOUTH AFRICA

According to the International Labour Organisation senior economist for conditions of work and employment, Patrick Belser (2012:3) argues that minimum wages across the globe have been ratified as social security policies with regards to notions that certain conditions of free market systems fail to produce the preferred outcomes in relation to a state’s social justice system. In South Africa the minimum wage is lowest wage rate, whether on an hourly, daily, weekly or monthly bases which employers in the different sectors legally pay employees whom are either unskilled or semi-skilled in the service business, in agricultural or manufacturing sectors and is prescribed differently in different sectors and areas (internet source 2013:1). In the constitution of the Republic Of South Africa, the Basic Conditions of Employment Act of 1997 provides the minister of Labour with the authority to regulate minimum conditions and terms of employment (Act 75 of 1997). The minimum wage is meant to benefit the vulnerable individuals and the minister of labour is advised by the Employment Conditions Commission (Williams 2013:2). The sectors were the minimum wage applies are the domestic workers, private security, wholesale and retail, farm workers, taxi industry, learnerships to name a few, were employees are not represented by unions or little union activity and wages are known to be extremely low (Mywage 2013:2). The minimum wage rate is annually reviewed and is linked with the consumer price index. The minimum wage was first introduced in 1999 by the then minister of labour, Membathisi Mdladlana and was created to benefit domestic workers (Blaauw & Bothma 2010:2). 3 MINIMUM WAGE, TODAY!

The current situation of South Africa’s minimum wage were the minister of labour announced the increase of the minimum from R69 to R105 resulted from the violent strikes which struck the agricultural sector in the Western Cape December 2012, as there is no official national policy for minimum wages (Bhorat Kanbur & Mayet 2010:2). However, the law provides the minister of labour with power to determine the minimum wage in specific sectors of the country, as she did in the agricultural sector (Coleman 2012:3). The minimum wage for farm workers was selected and centred on a report from the Bureau for Food and Agricultural Policy (BFAP) commissioned by Agri SA (Lilenstein 2013:1). There is about 4.5 million workers in South Africa whose minimum wage is decided by the process which is in line with the Basic Conditions of Employment Act (Lilenstein 2013:1). The minimum wage according to recent studies shows that 44% of...
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