National minimum wage, no relief for poor

2016-11-30 06:00

“PERPETUATING the cycle of poverty.” That is the feedback from Pacsa (Pietermaritzburg Agency for Community Social Action) regarding the proposed minimum wage of R3 500 which, if passed, Pacsa believes could trap millions of workers in continuing the cycle of poverty.

According to a statement from Pacsa regarding the minimum wage, the organisation is confident that the amount is not sufficient to assist the masses with their financial commitments.

“Because our unemployment levels are so high and our labour absorption rates are so low, and because most black South African households rely on one wage earner, the level of wage becomes important. When R3 500 is dispersed through a black South African household of 3.9 persons it becomes R897.44 per person. This is below the current upper bound poverty line of R1 077. It means that the national minimum wage of R3 500 will remain a poverty wage,” read the statement.

Pacsa claims that should the minimum wage be legalised this will deepen inequality among South Africans.

“Low-income workers tend to experience inflation at a higher level, ...this will continue to trap working families in poverty.”

However, according to an article in News24 that quoted Wits University’s Dean of Commerce Law and Management, Imraan Valodia, who led government’s research into a proposed minimum wage, R3 500 was decided on in an effort to prevent job losses. While Valodia said that it would have been ideal to propose a higher wage, supporting evidence and job destruction led the panel of experts to the current proposed figure.

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