11 December 2023
TLU SA (Transvaal Agricultural Union of South Africa) says the government is short-sighted in raising the minimum wage again and is using the latest announcement to garner votes in next year’s election.
“It’s unfortunate that with every government announcement at the moment, we see election promises in it. There are other realities that need to be addressed, such as weak economic growth and unemployment,” says Bennie van Zyl, CEO of TLU SA.
He was responding to the announcement on Thursday by the committee that determines the national minimum wage, inviting stakeholders to submit written comments on the wage increase by January 8.
“Our labour committee is already examining the proposals and will respond in time,” Van Zyl said.
Three proposals
The committee has tabled three proposals. Most committee members want the national minimum wage to be increased by the inflation rate plus three percentage points.
According to Statistics South Africa, the inflation rate was 5,9% in October, up from 5,4% in September.
According to the Government Gazette, the business sector wants an increase in line with inflation. An independent commentator wants the minimum wage to be increased by inflation plus 0,75 percentage points.
Van Zyl is concerned that an increase will fuel unemployment. “With unemployment already running rampant and layoffs by the private sector and state institutions, we consider the possible increases as shortsighted and a dramatic proposal that will inevitably mean more layoffs. We may have to talk about a minister of unemployment in the future,” he said.
According to him, the government’s policy environment is causing problems such as a decline in investor confidence and an increase in unemployment. “Ultimately, the entrepreneur and private company must make decisions based on their profitability.”
He also says that as mechanisation and technology improve, they can increasingly replace expensive labour. “The government’s solution is to distribute more social grants, but it is not sustainable, and the pool of taxpayers is shrinking as people emigrate. In the days we are in now, an increase would be fatal. We believe increases should be regulated by market forces.”
The committee consists of representatives from organised labour, business, communities and labour experts. Its invitation for input follows similar notices in August and September. According to legislation, the committee must review and adjust the minimum wage annually.
In 2021, the committee set the wage at R20,76 per hour, and in 2022 it rose to R23,19. This year, it was increased to R25,42.
Thulas Nxesi, Minister of Labour, will announce the 2024 increase in February and it will take effect on March 1.Written comments can be sent to Private Bag Xl 17, Pretoria, 0001, or to nmwreview@labour.gov.za.
