Cosatu pleased with hike in minimum wage, SACCI says ‘makes no sense’
The Congress of South African Trade Unions (Cosatu) has described the 8.5% increase in the national minimum wage as a step in the right direction.
Minister of Employment and Labour Thulas Nxesi has announced an increase in the minimum wage from R25,42 per hour to R27,58 per hour.
The new rate will be introduced from March 1, and will include the wages paid to farm and domestic workers.
The national minimum wage was first introduced in 2019 at R20 per hour.
Cosatu spokesperson Matthew Parks said the increase will help to rebuild the economy.
“We think its going to help about six million workers to earn within the range of a minimum to ensure that they are protected from the rising cost of living and also to help them take care of their families. This is also better for the economy because if workers have more money in their pockets, they spend it on the local economy, buying food and clothes or paying for transport.
“We are happy with the progress we’ve made since minimum wage came into effect in 2019 when at that stage it was R20 generally, and it will now be R27,58. Also, the huge progress we’ve made for farm and domestic workers who originally earned R18 and R15 an hour and now have equalised the wage to R27,58c an hour.
The sentiment is not shared by the South African Chamber of Commerce and Industry, with CEO Alan Mukoki saying the increase makes no sense.
“The increase in itself is problematic in that, while we are all busy fighting inflation and high interest rates, which tend to go together, we see that particular increase which is three percentage points above the average CPI at the end of December. In other words, now you’re giving the minimum wage almost 60% above inflation, and that doesn’t make any sense.
“The idea that we can build an economy on cheap labour is false. We ourselves do not support cheap labour because cheap labour does not necessarily grow our businesses. When people do not have enough disposable income they cannot buy services, productions and goods that we make. So, that’s not necessarily good for the economy, so that is not our argument either.
“Our argument is that, at this time when you’ve got high rates of unemployment of more than 10 million people who are unemployed, and then you increase the minimum wage and actually legislate it to make it illegal for anyone to pay less. What you then do is you create these three problems that we are raising: businesses that will not necessarily afford, interest rates are high, and you’ve got a lot of problems around infrastructure,” added Mukoki.
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