The rising cost of living and inflation hit workers the hardest as they have no disposable income as the bulk of their meagre wages was spent on electricity, transport and food whose inflation rates far exceed CPI.
The DA’s opposition to the proposed increase of the national minimum wage (NMW) is an assault on six million farm, domestic, construction and security workers, says Cosatu.
In its submission to the National Minimum Wage Commission on the cut-off date of September 30, the DA said the existing R27.58 per hour minimum wage should be retained.
The NMW Commission is conducting an investigation into possible adjustments to the minimum wage as it is required to do so by the National Minimum Wage Act.
On Wednesday, DA spokesperson on employment and labour Michael Bagraim said while his party recognised the good intentions behind raising the minimum wage, they believed it will serve only to worsen the country’s already extremely high unemployment rate.
“The DA suggests keeping the current minimum wage unchanged,” he said.
“South Africa’s labour market is constrained by multiple factors, especially the impact of the minimum wage on employment opportunities. The current NMW creates barriers for the unemployed, particularly young people and low-skilled workers, by setting a wage threshold that businesses may not be able to afford,” he said.
Cosatu, however, slammed the DA for its “stunning attack” on the NMW in calling for it to be frozen and not adjusted to protect it from inflation.
“This is an unashamed assault on the six million farm, domestic, construction, cleaning, security, hospitality and other workers dependent upon the NMW,” said Cosatu parliamentary coordinator Matthew Parks.
In its submission to the NMW Commission, the DA said the minimum wage was a policy that contributed to keeping people unemployed.
“The minimum wage is R4412.80 monthly, more than double the upperbound poverty line.
“Many unemployed persons would be willing to work for less than the minimum wage; however, with this minimum in place, an employer will only hire a person if they believe they will receive more value than what they must pay the employee.”
Bagraim stated that many companies were unable to hire new employees unless their productivity exceeded the mandated minimum wage.
“As a result, the most vulnerable segments of the population are locked out of the job market, perpetuating a cycle of R27.58 per hour poverty and dependency on social grants.”
Bagraim said the DA was proposing labour reforms that would expand job opportunities, particularly for the youth, such as a Youth Employment Opportunity Certificate and amending existing collective bargaining structures to benefit small businesses.
Parks said the NMW Commission was legally required by law to review and adjust the minimum annually to protect it from being eroded by inflation and to ensure it retains its poverty and inequality alleviation impact.
Parks charged that the rising cost of living and inflation hit workers the hardest as they have no disposable income as the bulk of their meagre wages was spent on electricity, transport and food whose inflation rates far exceed CPI.
“If the DA call to collapse the NMW was genuinely motivated by employers struggling to pay it, it would have provided proposals on existing provisions providing such employers’ exemptions,” he said, adding that NMW Act entitled any employer to apply for an exemption provided that they have consulted workers and submit copies of their financial statements confirming such distress.
In its submission to the NMW Commission, Cosatu recommended that the minimum wage be increased by CPI plus 3%.
Cape Times