American city shows how a minimum wage leads to unemployment and poverty

Adv Anton Alberts

It is of the greatest importance that the South African government takes note of the devastating effects that a minimum wage had in Seattle, America, where it had led to massive unemployment even before the legislation is enacted on 1 April, Adv. Anton Alberts, the FF Plus’ parliamentary spokesperson on the economy said.

In South Africa a minimum wage is also on the cards and the ANC government has already said that it is determined to force it through as soon as is possible.

Public hearings on minimum wages are currently being held throughout South Africa and the National Economic Development and Labour Council (Nedlac) has to report to government on the effects of a national minimum wage by July 2015.

According to Alberts there are already reports from America on the effect of compulsory higher wages in Seattle in the state of Washington.

According to a report in the Business Day this week, Washington’s policy centre revealed that enterprises have already closed months before the legislation is to come into force. The minimum wage that will be in place in Seattle will be $15 per hour, while the federal minimum wage will amount to half of that amount.

According to reports, the American Chamber of Commerce had already warned at the beginning of last year that it would lead to unemployment, but no attention was paid to the warnings.

Adv. Alberts says there is no doubt that the effect on South Africa, with its smaller and weaker economy will be much more destructive.

“Cosatu, just like other trade unions who are proponents of a minimum wage, are demanding up to R7000-00 a month. South Africa is already struggling with high unemployment and higher wages will in all probability curb job creation and cast more people into poverty while only a small number will gain anything from it.

“The FF Plus will continue to bring the reality of this to the attention of government. In America a huge city has nearly been brought to a standstill by minimum wages. In South Africa it could happen to the whole of the country,” Adv. Alberts says.


Contact no.: 082 391 3117 / 083 419 5403