‘The committee was particularly struck by the “cruel irony” that if jobs are lost because employers cannot afford to pay more, it is likely to be the most vulnerable low-paid workers who will be affected.  It looked particularly at the sectors that would be most vulnerable.  In domestic work, 91% of workers earn less than R3,500, so the committee proposes an initial 75% of the minimum for this sector and 90% for agriculture, where 85% of workers earn less than the minimum.  Other sectors such as construction and trade also have large numbers of workers below the line, but the gap is not as wide (see graph).

The new minimum, it seems, would trump any sectoral determinations or collective bargaining agreements with lower minimums.  But the committee, and Deputy President Cyril Rampahosa, have said the new system can coexist with existing wage dispensations under the Labour Relations and Basic Conditions of Employment legislation.  Whether they can coexist remains to be seen’.

Minimum wage beats sectoral stipulations: Hilary Joffe / BusinessLive / 22 November 2016

See also: Purpose and adverse impact of minimum wage

Further excerpts

The R3,500 national minimum monthly wage that the committee of experts has recommended is below the “working poverty line” of R4,317 — but well above the minimum wages in all the sectoral determinations that the minister of labour has in place.  These protect about 5-million workers in sectors where there is no wage bargaining between trade unions and employers.

That captures just how high, yet how low, the R3,500 is relative to what millions of working South Africans actually get paid in practice.  About 47% of the workforce earn less than R3,500 and the lowest sectoral determination wages range from R1,813 in domestic work to R2,761 in the hospitality industry and R2,844 for contract cleaners.

It also captures some of the difficulties of launching a national minimum wage in an economy that has high levels of inequality and poverty — but also much unemployment.

Those difficulties include the question of how the proposed national minimum wage will interact with the many existing collective bargaining and legislated wage minimums, and what will happen to jobs in sectors where wages would have to lift significantly.