The Fight for a National Minimum wage

The implementation of neoliberal policies such as GEAR and the NDP has always been accompanied by an increase in a number of precarious workers (low paid workers). The recent statistics demonstrate the shocking level of poverty among low-paid workers. The Statistics South Africa’s says that, last year, half of South Africa’s workers earned less than R3 033 a month and often do not receive non-wage benefits.

The commodification of electricity, water, and the rising costs of food also put huge pressures on these low paid workers. In addition, the majority of precarious workers do not belong to any trade union and therefore, their wages are not regulated by the collective bargaining agreements. The point is that the wages of precarious workers are generally left to the discretion of employers.

With the introduction of the National Minimum Wage (NMW) the situation of the precarious workers is likely to improve. The NMW commonly refers a basic minimum wage floor, below which no worker should be allowed to fall. Nonetheless, the main underlying principle of minimum wage fixing is the reduction of income inequality that is characteristic of South Africa.

The most common criticism of NMW is that it would have a negative impact on employment. This criticism mainly comes from the ideologues of the ruling class, such as the Democratic Alliance and Free Market Foundation.

These organisations believe that any effort to regulate wages should be opposed, merely because wage regulation stalls economic growth and job creation.

In their view, the existing sectorial minimum wages set through the Employment Conditions Commission (ECC) (under the Basic Conditions of Employment Act) or through collective agreements between employers and unions in bargaining councils (under the Labour Relations Act) are bad, and the prospect of a NMW is even worse.

In other words, the argument of the bosses and their representatives is that the level of wages determines the number of workers employed by the capitalist class. Keep wages low and more people will be employed. This is a flawed economic thesis. The capitalist class employ workers mainly because of the demand for goods and services. When the demand for goods or services is higher, the capitalists are often left with no options but to employ more people. Hence, the claim by the ideologues of the ruling class that the NMW inevitable cause unemployment because of its promotion of high wages is wrong.

Even if this claim is true, the starvation wages, which are paid to millions of South African workers, have not contributed to the high employment rate either. On the contrary, present estimates put unemployment as high as 25 to 40 percent and still rising. Moreover, the claim that NMW lead to unemployment is contradicted by the research. Both David Card and Alan Krueger in their research published in the book called “Myth and Measurement: the New Economics of the Minimum Wage”, noted that “The weight of this evidence suggests that it is very unlikely that the minimum wage has a large, negative employment effect”.

In addition, Hristos Doucouliagos and T. D. Stanley conducted a metastudy of 64 minimum-wage studies published between 1972 and 2007 measuring the impact of minimum wages employment in the United States. Their results corroborated Card and Krueger’s overall finding of an insignificant employment effect from minimum-wage raises”. These studies, without doubt, confirm that there is little or no evidence that NWM has a negative effect on employment. In other words, the empirical evidence against the NMW is weak or just non-existent.

Even though, the ANC in its election manifesto and January 8 statement spoke in favour of NMW and tasked the labour department to investigate the modalities of implementing it. Unfortunately the implementation of a NMW is by no means guaranteed without a real fight. But perhaps most importantly, we should not depend on the government to enact the NMW for us.

Our strength is in numbers. The more organized and united people are, the better prepared they will be to gain higher wages. Unions have understood this for decades. We must tell the government what our living needs are. We must recognize that only through organization and the will to strike will we have the strength to increase our wages for all workers.