Editorial: The magic wage number

2016-11-27 14:54

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‘This is not a living wage. We have to be clear on that.”

So said Deputy President Cyril Ramaphosa at the release of an expert panel’s recommendation for the long-awaited national minimum wage.

He called it the “magic number” we have been waiting for.

For many, it seems like more of a cheap trick.

The R20-an-hour proposal is not revolutionary, not least because it only comes to R20 in 2019, when inflation will have significantly eased the way already.

It draws a line not far from where most employers would have been anyway. By
then it will be even further below what
many now consider a minimal living wage: R4 500.

The considered view of this panel – a group of academics that no one could accuse of leaning to the right in economic affairs – is essentially that paying many people less than what they require to live on is a necessary condition for the functioning of the South African economic system.

Some people call this “super exploitation”. To most people today it is sadly just common wisdom.

Will this magic number lead to widespread job losses? Probably not. Will it fundamentally change the fortunes of the working poor? Not any time soon.

All those who were expecting something significantly higher than the minimum wages that already exist now, need to take stock of what the proposal does deliver.

The most meaningful thing about this magic number is probably how we raise it when the time comes and conditions are ripe.

And when, gods willing, we are no longer living in mortal terror of ratings agencies.

It is a mechanism among the tools that already exist and that are still being built. If the real wage is not yet a living wage, then the social wage has to pick up the slack.

Unlike the magic number, this requires a state that works.

It requires National Health Insurance, public transport, free and subsidised education and lots more besides.

It is time to stop talking about these things in isolation.

Read more on:    minimum wage

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