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Minimum wage could dent inequality, boost GDP

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Cape Town - A national minimum wage set at a meaningful level will significantly reduce poverty and inequality and give a welcome boost to South Africa’s GDP, new research shows.

Applied Development Research Solutions (ADRS) – a company that does economic modelling and research – recently published a working paper to consider the effects on the economy should a national minimum wage be implemented.

In the study a particular economic model was used that captures the interactions between macroeconomic performance in South Africa with poverty and income distribution at a household level to see what effect a national minimum wage would have on household income, consumption and GDP growth.

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