Cosatu accepts minimum wage

Johannesburg - South Africa’s main labour union federation accepted a government-proposed minimum wage of about R3 500 a month, calling it a “step forward for the country”.

While Cosatu favoured a minimum monthly salary of R4 500 rand a month, the government’s proposal “is still a significant starting base towards a living wage,” Congress of South African Trade Unions (Cosatu) secretary general Bheki Ntshalintshali told reporters in Johannesburg on Thursday.

President Jacob Zuma’s administration wants it to start on May 1 next year.

The government has said businesses that aren’t able to afford the minimum wage for a 40-hour week will be able to apply for an exemption. With an unemployment rate of almost 27%, South Africa has 6.6 million people earning less than R3 500 monthly, Deputy President Cyril Ramaphosa said last month.

S&P Global Ratings, which has had a negative outlook on South Africa’s BBB- assessment for more than a year, has said the country needs to reform labour laws to reduce protracted strikes and create certainty about black empowerment laws in mining to avoid a cut to junk.

Fitch Ratings  also has South Africa at the lowest investment grade, while Moody’s Investors Service rates the nation’s debt one level higher.

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