Minimum wage drive ‘needs to raise its aim’

Picture: Thinkstock

Picture: Thinkstock

Government has probably realised a “one size fits all” approach to setting a national minimum wage won’t work across all sectors and differentiation is a necessity, says Gerhard Papenfus, chief executive of the National Employers’ Association of South Africa (Neasa).

The problem is collective bargaining and sectoral determinations already do this in effect, he says. “It makes no sense to ‘reward’ or protect an unskilled and poorly educated workforce with inflexible wage arrangements and high wages, or rather wages not justified within a market over which no one has any control, or at least very limited control (especially within the global market context),” he says.

The result is a fallback on unskilled, cheaper workers which exacerbates unemployment. ” If you put into the mix a largely low-skilled workforce, poor education and extremely rigid labour law arrangements, any fiddling with minimum wages … will lead to increased unemployment. In a situation where almost half the population is unemployed, and youth unemployment is even higher, such a policy direction is short-sighted, even reckless,” says Papenfus.

Increasing job security without matching skills and productivity goes against the law of the labour market: “Workers cannot have it both ways. That’s the law of the labour market. All labour markets.

“Lasting, increased wealth, which includes improved wages, can only be the result of economic growth, which in turn will be the result of improved skills and education, improved ethics in the workplace by both the employer and the worker, the total eradication of a sense of entitlement and the acceptance of personal responsibility. There is no other formula.”




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