National minimum wage

[Dave A]

So there's talk of a national minimum wage of R3500.00 per month.

What do you think the consequences might be?
Good or bad for the economy?
How will it affect unemployment?

For me the scariest part of the story is that about 47% of the employed folk in SA earn less than this!!

[roryf]

Dave,although the official figures say 47% earn less than the minimum wage in the formal sector.I firmly believe that there is a lot of trading/odd jobs etc. that go on within the township segment. A lot of the guys that I employ have other ways of bringing in a second income.

The informal markets are booming and the government doesn't have much of a clue as to how much money changes hands in these environments.

That said,I think the minimum wage will hurt many small businesses but we need to start somewhere in fixing our country.I certainly wouldn't like to live on R3500/month.

[activeconsumer]

I have asked this question on my own page but had no answers - do anyone know who the target market for this is and what exclusions there are ? I know farmworkers and domestic workers are excluded in this specific instance

[Justloadit]

At the moment this is a recommendation, and is not set in stone, and is up for discussion and comments from the public. There is talk of modifying the minimum wage according to sectors, but the recommendation is that f it is accepted and gazetted, then this will be introduced over a two year period, allowing the market to absorb the higher minimum wage increase.

[AndyD]

For me the scariest part of the story is that about 47% of the employed folk in SA earn less than this!!

I only have one guy employed who even close to that pay bracket, he has no formal quals and is employed as a general labourer, ie he sweeps floors, washes vehicles and occasionally works on site digging or just general assistant loading/unloading etc. He earns just under R4K per month and he seems to make ends meet. He's pretty savvy regarding finances and he has a dislike of credit saying he only buys things if he's got cash to pay for it.

From what he says there's very much a 2-tier system where for guys in informal or less opulent areas things are far cheaper. He buys a monthly train ticket which costs R340.00 for a 70km roundtrip commute. He lives in a flat in Nyanga in a half decent area and his rental payments are subsidised by some kind of housing association, from what I remember he pays in the region of R400 pm rent. He also gets a free electricity and water allowance so his utility bills are maybe R100 PM. He has a second house in the Easern Cape which he's built cash so no bond and the school fees for his two children are <R400 pm. I've been to his flat in Nyanga and was pleasantly surprised, it has most mod cons such as TV, fridge/freezer, stove and oven, full bathroom etc. I think the killer for him is the cost of groceries for him and his family but he's definately not living below or even close to the breadline.

[Blurock]

Why is it necessary to have a minimum wage? Why do we not just pay people what they are worth?
How can corporations afford to pay CEO's R 50 mil, R60 mil or more, while the people who are actually doing the work have to battle to make ends meet? I would be too ashamed to pocket R100m in annual benefits as a retiring CEO of a well known supermarket recently did.

A small family business may not be able to pay the minimum wage, yet someone may be willing to do basic work just to get an opportunity to get into the job market. Our business was started on less than the minimum wage, but our loyal workers were prepared to chip in for the first year and thereafter grow with the business. We, the founders, did not get one cent in salary for the first year.

Starting with a staff of 4, we now employ 30. They do earn more than the minimum, but not as much as they should. They do however understand that we are still growing and we pay for what they have done, not for what they are going to do. Earnings and staff benefits are substantially more than when we started and staff realise that there are opportunities to grow and earn more. 2 staff members have left for greener pastures, but I am proud to say that our core team are loyal and proud of our achievements to date.

Maybe we should not have a minimum wage, but rather consider a maximum wage. If an entrepreneur has risked his existence in establishing a new business, he/she is entitled to just reward. My gripe is with big corporations who employ professional managers to run the business for them and then walk away with the spoils to the detriment of the shareholders and workers.

Shareholders should stop being so passive and start noticing what is happening at board level.