Great, we have minimum wage, but where are the jobs?

Great, we have minimum wage, but where are the jobs?

Economists have warned that the minimum wage agreement won’t solve the problem of unemployment.

With Deputy President Cyil Ramaphosa’s assertion that the increase to R20 an hour for the minimum wage won’t alleviate poverty, the fact remains that there aren’t enough jobs to go around.

“Our biggest problem is jobs,” economist Mike Schussler said. “I would rather have more jobs than a few people in jobs, getting more money. While we want to up the minimum wage, we must be careful because we already have 27% unemployment.”

Economist Azar Jammine said one of the problems was that more households are dependent on one income earner.

“We have to move away from that. More people need to be educated to become more employable. We have the lowest levels of labour absorptions of people working in the world,” said Jammine.

Ramaphosa, who answered questions in parliament yesterday, agreed there were concerns that businesses may not be able to pay, and jobs may be lost. But he said businesses in that position could apply for a 12-month exemption. The increase to R3 500 will be effective in a year’s time.

“I agree that the R3 500 minimum is the type of wage that is not going to wipe out poverty in this country … I agree it’s not a living wage … but it’s a very good start,” he said, responding to a question from ANC MP Fezeka Loliwe.

Ramaphosa said government had until next year to ensure the right people were in place to police payments of the new minimum wage, which would affect about 6.6 million people.

“There was a panel that advised the social partners [that] initially said there may well be job losses, but the information at hand is not definitive … sometimes the issue of job losses is exaggerated,” said Ramaphosa.

“We are not flying into this blind. We are taking fairly calculated measures.”

Negotiations with the National Economic Development and Labour Council have come to a close and have been lauded by both President Jacob Zuma and Finance Minister Pravin Gordhan.

However, labour federation Cosatu has yet to endorse the deal, arguing for R4 500 as a minimal wage.

Schussler said South Africa’s minimum wage was in the top third in the world.

“I agree that R3 500 is the type of wage that won’t wipe out poverty. But a minimum wage is not a living wage – it cannot be.

“Someone on minimum wage is still entitled to child and disability grants or an old age grant that starts at age 60.

“We have a reasonable wage; it’s on the high side. We have to be careful. Start with a lower wage and try to work it up systematically.

“We have grants to supplement income, subsidised housing, free water and lights. People get free health and education. We have a lot of help.”



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