The national minimum wage should be frozen until the country is over the financial crisis caused by the Covid-19 pandemic, says a large employer organisation.
The National Employers’ Association of South Africa (Neasa) says the minimum wage is part of a raft of “suffocating” labour laws which are not viable under current circumstances in a developing country trying to get on its feet.
Neasa has, among other issues, asked whether a person receiving a monthly grant is better off than someone who could be employed, but would receive less than the minimum wage.
Neasa’s Gerhard Papenfus and Theo de Jager asked this week: “How can anyone argue that it is better for a person to be unemployed, rather than being exploited in a job for which less than a minimum wage is paid?”
“It is more exploitative to not be able to find a job due to the minimum wage. Neasa does propagate exploitation, but does support the right to work. A potential employee is under no obligation to accept any offer from an employer he is not satisfied with,” Neasa told The Citizen.
They argue that many labour forces in sectors such as farming are forced to reduce rather than expand the amount of workers, adding that not being able to appoint a job seeker at below minimum wage, even with their consent, “condemns [them] to a life of abject poverty.”
They argued that, because of the minimum wage stipulations, sectors such as farming were forced to reduce rather than expand the amount of workers, adding that not being able to appoint a job seeker at below minimum wage, even with their consent, “condemns [them] to a life of abject poverty”.
NMW vital in preventing exploitation
The solutions to the country’s problems exacerbating unemployment are, however, not as simple as suspending national minimum wage (NMW) requirements, said University of the Free State head of economic and management sciences, Professor Philippe Burger.
Public Servants Association of South Africa (PSA) acting general manager, Leon Gilbert, said although in his opinion the NMW is not enough to sustain a living, the NMW is there to protect employees from being exploited.
“If you take away that protection, vulnerable employees will have to fend for themselves, and employers can offer any salary,” he said.
University of Pretoria economics department head Steve Koch said minimum wage laws have not been helpful, explaining that despite the NMW, employment continues to fall in sectors where it is imposed.
However, Koch added that the current position of the economy suggests that “the level of the minimum wage, at the very least, should be carefully reconsidered.”
The current NMW is R20.76 per hour. Farmworkers earn a minimum of R18.68 per hour, domestic workers R15.57 per hour, and public works programme workers get R11.42. In terms of the Labour Relations Act of 1995, no employer may employ a worker and pay them below the NMW.
For Neasa, earning below NMW is better than relying on a R350 monthly “handout”.
“The national minimum wage is… R4,045 per month for a 45-hour workweek. Social grants are not close to this amount,” Neasa said.
Covid-19 a new excuse for old exploitation
National Union of Metalworkers (Numsa) spokesperson Phakamile Hlubi-Majola emphasised the union’s condemnation “in the strongest terms” for the proposal made by Neasa.
“Neasa wants a labour regime which is totally unregulated, just like it was under apartheid when workers, particularly African workers, had no rights and could be fired and abused at will with no consequences for the white boss.”
Hlubi-Majola dismissed Neasa’s suggestions to amend labour laws and NMW requirements as “nonsense”.
According to Burger, even before Covid-19, between 40% and 60% of businesses did not comply with government’s prescribed NMW.
This was reiterated by Gilbert, who explained that employers refusing to comply with labour laws before the pandemic now have “ample excuses” not to pay their employees their full salaries.
“One must always strike a balance between abuse and fairness. Currently some people are using Covid-19 as an excuse for abuse. This is an old debate that has found a new excuse,” Gilbert asserted.
For Hlubi-Majola, Neasa’s proposal is using Covid-19 “as an excuse to justify exploitation, particularly of black people, by saying that employers should be able to hire an unemployed person at less than R20 per hour.”
Neasa argued that the majority of South Africa’s population has been disadvantaged for 20 years by “poor economic policy and the inability of government to grow the economy and create jobs.”
Gilbert felt it was “incomprehensible” that someone would not be willing or able to pay workers R20 for an hour’s work.
Burger said if employers cannot pay NMW, their businesses likely have bigger problems.
Hlubi-Majola pointed to the fact that inequality among workers of different race and gender groups in South Africa is still rife, further disadvantaging unemployed people.
According to Stats SA, white people are likely to earn up to three times as much money than black workers, and female workers on average still earn roughly 30% less than male workers.
Workers need more protection than ever
For Burger, from an ethical standpoint, waiving the NMW is not the answer. Despite the NMW argument being largely dependent on sectoral issues, he said there are other issues that need fixing first, such as getting private investors back on board to help get the economy going again.
From an economic standpoint, Koch said that Covid-19 “is raising business costs and will eat into profits from some time. Potentially making it worse, through a higher minimum wage, is probably not the best idea.”
But from a labour perspective, Gilbert said in the context of Covid-19, workers need more protection than before. He said we should be asking “how do we improve the minimum wage – and not why we are making excuses.”
“It is sad that people use disaster to achieve the means they strove for long ago. For me, it’s a social justice issue.” He added that the social grant system cannot handle any more pressure, so paying minimum wages would be more profitable than awaiting payouts.
The age-old debate reignited by Neasa involves a more comprehensive approach that tackles issues from load shedding preventing economic growth to restoring investor confidence, and encouraging people to work by paying them what they are owed.
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