/ 11 September 2014

Editorial: SA’s wage-floor quandary

Editorial: Sa's Wage Floor Quandary

The government has been so frozen on protecting Number One from the public protector and other alleged subversives that it has become increasingly hard to see evidence of it actually governing.

Some would think this is not a bad thing. Let it get out of the way so that ordinary citizens can get on with the business of growing the economy and jobs. But sadly, many of the metrics by which we measure progress are going the wrong way. Inaction is of no use now – we need a government to point the way out of the current hard times.

But here – suddenly – is a flurry of activity in the area of minimum wages. Deputy President Cyril Ramaphosa, apparently intent on salvaging his reputation as a champion of the workers after the Marikana disaster, told a Nedlac (National Economic Development and Labour Council) summit there needs to be progress on establishing a national minimum wage. He was articulating ANC policy as agreed to at the party’s Mangaung conference.

The trouble is that we already have minimum wages, set either by industrial council bargaining in union-organised industries or determined by the labour minister in largely disorganised sectors such as domestic work and agriculture.

There have been suggestions of what the wage should be. The range is calculated as R3 000 to R6 000 a month for a five-person household, though most advocates of this view appear to support a midpoint figure of about R4 500. To provide a broad comparison, consider that workers covered by industrial councils had their minimum wage set at R2 725 in 2011. Agricultural workers now get R2 400 and domestic workers R1 880.

The obvious advantage of sectoral determinations is that they take account of the very different conditions in different parts of the economy. To be enforceable, a national minimum would have to sink to the lowest common denominator – so it wouldn’t make much difference anyway.

Ramaphosa, who knows what will please the headline writers but also knows an intractable problem when he sees one, is doing the practical thing and sending the matter to Nedlac, an organisation allegedly set up to promote the cause of co-economic determination, but which in practice seems to do very little.

One suspects that this is to ensure that the national minimum wage remains permanently in process and never sees the light of day again.