National minimum wage a moot point at Cosatu conference

Congress of South African Trade Union (Cosatu) will discuss implementing a national minimum wage in all sectors, at its congress starting on Monday.

"An initial national minimum wage set at say R2 800, while still low, would have an immediate positive impact on millions of workers," the Cosatu said in its organisational report.

"This national minimum would be a legislated basic wage floor, below which no worker could fall," it said.

Cosatu said there were two ways to calculate a possible minimum wage.

It could be based on a minimum living level, although South Africa does not have an agreed standard.


The Labour Research Service has suggested a level of R4 105 for a family of five, while the University of South Africa (Unisa) has put forward a supplementary living level of R4 000 and the University of Pretoria's household effective level is R5 500.

These figures are based on the cost of a basket of goods that each institution defines as necessary for basic living.

The second way of calculating a minimum wage is to look at the proportion of the average minimum wage to the national average wage.

The International Labour Organisation (ILO) argues that a national minimum wage should not be less than 40% to 50% of the average wage, or about two-thirds of the median wage. The median wage is the point at which the same number of workers earn below and above the median.

"Our current ratio is around 22% of the national average wage.

"If we took a ratio of 40%, we would be looking at a minimum wage of between R4 800 and R6 000, or below that is if we use the median wage calculation," Cosatu said.

"If we were to use these international yardsticks, we would arrive at a national minimum wage of around R5 000."

Trade-off
Cosatu said this was double the current average minimum wages of the sectoral determinations, which control the terms and conditions of employment for workers in particular sectors.

"It might be difficult to achieve this in one bite, even with the strongest of campaigns."

Cosatu suggested looking at a first step of around R2 800. This figure lies between the average minimum in sectoral determinations (R2 118) and the average minimum wage of existing collective bargaining agreements (R3 405) in 2011.

"This figure is purely raised for discussion purposes, and is not intended as a firm proposal," Cosatu said.

The introduction of a national minimum wage in Brazil did not lead to massive job losses, Cosatu said.

However, Adcorp labour economist Loane Sharp said the introduction of a national minimum wage would definitely lead to job losses.

"It's definitely feasible, but there's a trade-off involved; the higher the minimum wage, the lower the employment," Sharp said.

If a monthly national minimum wage of R5 000 was set, anyone earning below that would probably lose their job, he said.

According to the Statistics South Africa Household Survey, 8.9% of the national workforce – or 1.21-million people – earn below R5 000 a month.

"What it means is that people who are not worth R5 000 to their employers will lose their jobs.

"Cosatu hopes that everyone who earns less will suddenly be pushed up to the minimum wage, but that is naive. Most people will simply lose their jobs," Sharp said. "It would be disastrous."

He said the average monthly wage in South Africa was R13 284 in the formal sector, outside farming. If the informal and farming sectors were included, the average monthly wage was R2 852.

Cosatu's 11th-national congress takes place from Monday to Thursday in Midrand. – Sapa.

Subscribe to the M&G

These are unprecedented times, and the role of media to tell and record the story of South Africa as it develops is more important than ever.

The Mail & Guardian is a proud news publisher with roots stretching back 35 years, and we’ve survived right from day one thanks to the support of readers who value fiercely independent journalism that is beholden to no-one. To help us continue for another 35 future years with the same proud values, please consider taking out a subscription.

Gillian Jones
Guest Author

Related stories

Advertising

Subscribers only

Medical aids blame external costs as fees increase beyond inflation

Medical aid is becoming more of a luxury for many South Africans, and it’s not about to get any better

Mahikeng compounds its mess

The ailing town that wasted R2-billion appoints a municipal manager rated ‘basic’, the lowest level

More top stories

Parliament owes South Africa an apology on state capture —...

The speaker told the Zondo commission she doesn’t know why the legislature woke up to state capture so late, but believes this won’t happen again

Cape Town fire ‘largely contained’, evacuation orders remain in place

Authorities confirmed the fire had been largely contained by early Monday afternoon, although reports suggest the fire had jumped the road near Tafelberg Drive

Zondo says break-in will not intimidate commission

The deputy chief justice said it was not clear if the burglary and a recent shooting were more than criminality, but vowed no one would deter the inquiry

European heavyweights face criticism over ‘cynical’ Super League

The 12 founding clubs of the breakaway competition have faced backlash from the football community
Advertising

press releases

Loading latest Press Releases…