“ECONOMIC Development Minister Ebrahim Patel yesterday sanctioned some clothing manufacturers paying below the statutory minimum wage until the end of December, in a deal that will keep the doors of 385 factories open”.

See the earlier blogs

Edward West has reported in Business Day today on the outcome of the NBC meeting yesterday – see Patel grants reprieve on minimum wages.   Here are two extracts from that report.

“The intervention of the former trade unionist and left-leaning member of the Cabinet casts a harsh light on SA’s often-criticised centralised bargaining system and minimum wages, while millions are jobless.

Mr Patel’s invitation for talks on a new deal has put a stay of execution on as many as 22000 jobs”.

In the same issue of Business Day there is an editorial – Better ways to win lowest-wage war.   These are some extracts, but it is recommended that the full report and editorial be read on the website of Business Day.

“A LARGELY silent battle is taking place in SA at the moment over the minimum wage.   The reason the battle is so quiet is because minimum wages are typically paid only in remote, rural areas, where the searching eyes of the media only rarely pry.   Yet every now and then, an incident does come to light and it seems Newcastle has become something of a focus point for the battle recently.

What has happened is that the Southern African Clothing and Textile Workers Union (Sactwu) has instituted legal action against the Newcastle Chinese Chamber of Commerce for shutting its factories.   The factories were closed in unison recently in response to a threat by the industry bargaining council to shut plants that were not paying workers the minimum wage of R324 a week”.

“The argument over the minimum wage is one of the most vexed in economics.

The argument in favour is simply that it increases the standard of living of the most vulnerable and the poorest people in society.   It might also increase the work ethic, encourage automation and reduce the cost of government social welfare programmes”.

“The best compromise, it seems, is to do away with the minimum wage, but to have sector- specific minimum wages set in industry-wide negotiations.   If such a system is good enough for Germany, Sweden and Denmark, then surely South African trade unions could hardly object”.