There are conflicting views on the subject and given our uncertain economic circumstances it seems pointless for the government to interfere with the current system of regulating minimum wages in various sectors.

Concerned about youth unemployment, the government faced down union opposition and introduced a special youth wage subsidy because it believed current wage levels prevent young workers from getting their first jobs.  The government should proceed with caution.  Current legislation already provides for increased minimum wages in all sectors if the government believes this can be done without job losses.  If, however, there are concerns about job losses, the law grants the government the flexibility to raise wages more gradually in vulnerable sectors to test the effect on employment levels.

Extract from Gavin Keeton’s article National minimum wage can cause job losses which first appeared yesterday in BDlive published by Business Day.

Further excerpts

SA already has minimum wages that differ by sector and region.  Thus minimum wages for domestic and farm workers are lower than in manufacturing.

Workers in rural areas are paid less than those living in cities.

Logically, a single national minimum wage will have to at least match the current highest sectoral minimum wage.  It will be unacceptable to cut the minimum in the higher-paying sectors.  This means minimum wages in the lowest-paying sectors could more than double.

Those who support a national minimum wage argue it will reduce inequality.  This is true only if employment is unaffected.  If employers cut jobs because they must pay more than they can afford, inequality may worsen.  Benefits for those on the new minimum wage will come at the cost of lost jobs for others.