The new national minimum wage, which will come into effect on the 1st of March 2021 and makes provision for a 4,5% increase on the previous minimum wage, will result in even greater job losses in a time of unprecedented levels of unemployment in South Africa.
Due to the current economic recession and the Covid-19 restrictions, unemployment is on the rise and small business enterprises are struggling to survive. The government must create a favourable environment for the private sector to stimulate economic growth and create more jobs despite the difficult circumstances.
The fact that the new minimum wage for farm workers was adjusted upwards with 16%, to make it equal to the national minimum wage, will also bring about job losses in that sector.
The same goes for the increase for domestic workers as their minimum wage was adjusted with nearly 22%. Fair and equitable compensation is paramount, but the sharp increases in the minimum compensation for these employees, specifically during a pandemic, and the increased pressure that places on the private sector's employers are unfair and nonsensical.
If will force these employers to retrench some of their employees in order to afford the new minimum wages.
In stark contrast to the strong stance taken by the National Minimum Wage Commission, the Minister of Labour, Thulas Nxesi, and his Department that private sector employers must pay a fixed minimum wage of R21,69 per hour, is the fact that the same does not seem to apply to the Department of Public Works' Expanded Public Works Programme (EPWP).
The minimum wage for these employers was set at R11,93. The argument put forth by the National Minimum Wage Commission for increasing the minimum wage is that it will stimulate the economy by raising poor people's buying power.
This does not appear to include the employees of the Public Works programme or the employees who will lose their jobs as a result of the increases.
The FF Plus is of the opinion that all workers in South Africa must be treated fairly and equitably and this includes fair and equitable payment, but suffocating employees with exorbitant increases, effectively bringing about even greater unemployment, oversteps the line of economic sustainability.
Raising the national minimum wage contributes in no way to a favourable environment for the private sector, it will cause businesses to close their doors and that will only lead to further job losses.
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