“PROPOSED MINIMUM WAGE COULD HARM THOSE IT’S INTENDED TO HELP” – URBACH
Written by: Xolisani Khumalo
Deputy President Cyril Ramaphosa proposed on Sunday night to raise South Africa’s minimum wage to R3500 in an attempt to better the lives of underprivileged South Africans. Businesses and employees alike, have had mixed reactions to how this change will affect their lives.
Two years ago various unions proposed that the official minimum wage be R4500, which makes this proposed increase bittersweet. Most start-up businesses and informal employers have expressed their concern with this increase because they might not have the finances to continue paying certain staff.
Young entrepreneur from Hillcrest, Siyabonga Nzimande said that it is an unfortunate proposal at an unfortunate time.
“I understand people can’t feed children on that amount, but I too as a black man will suffer if I pay R3500 for our lady. This proposal could lead to loss of jobs or businesses failing because they spending too much money on salaries” said Nzimande.
Leader of the National Economic Development and Labour Council, Professor Imraan Valodia said that 47% of currently employed people earn below this new proposed rate.
“At the number of R3500 of R20 an hour what you have is 47% of South Africans who earn less that. Also we would accept that this proposed wage is too low, but also accept that it’s a step in a process toward dealing with the problem,” explained Valodia.
According to a press release by the South African Government News Agency, Ramaphosa said that the proposed figure is still to be discussed by stakeholders before a final amount is decided on.
31-year old domestic worker, Fikile Sibiya had mixed feelings about what this increase could mean for her and her family.
“I will explain it like this: right now I am earning peanuts, if this proposed increase does really happen I’ll be getting a more expensive kind of peanuts but at the end of the day I am still getting peanuts. This basically means that even though I earn very little right now, R3500 will help me in some way but it is still extremely little to be living and supporting my children on,” said Sibiya.
Although the proposed R3500 is not the official amount and Ramaphosa is still to discuss it with stakeholders, it still has various unions up in arms as it is below what they had proposed two years ago.
Director and Economist with the free market foundation, Jason Urbach said that the proposed minimum wage could potentially hurt the people it’s intended to help.
“By introducing the minimum wage you are simply cutting off that low end which essentially means more people will remain unemployed,” explained Urbach.
This proposal also caused a stir on social media as people linked the announcement to other social issues that were addressed in this year such as #FeesMustFall.
“Minimumwage is R3500, Registration fee is 5500, Tuition fee per month at R3500 plus accommodation…Black child you are on your own – FeesMustFall,” tweeted Magalela (@Sakhilemagalela)
COSATU also joined the conversation and tweeted: “The #NUM will pronounce its decision on #MinimumWage during the upcoming extended NEC meeting on the 23rd to 26th of November 2016” (@_cosatu).