Minimum wage – let common sense prevail

It is common knowledge that key among the challenges the apartheid regime bequeathed the democratically elected government was an inefficient labour market environment characterised by, inter alia, the unscrupulous exploitation of workers.

In an effort to reverse this trend, the democratic government introduced a number of labour market interventions, including the promulgation of the Labour Relations Act and the Basic Conditions of Employment Act.

In order to provide additional protection to the most vulnerable and exploited categories of the workforce, sectoral determinations were promulgated for domestic and farm workers, prescribing minimum wages and improved conditions of service in these two sectors.

Despite the fact that the promulgation of the sectoral determinations was preceded by extensive evidence-based research, these initiatives were met with ill-informed vitriolic attacks and polemic by free market fundamentalists who believe in an unregulated labour market. These critics pontificated that labour market interventions through sectoral determinations introduced labour market rigidities which would result in large-scale loss of employment.

Some compatriots, especially those who themselves employ domestic workers, argued that an average national minimum wage (NMW) of R5 000 per month for domestic workers employed in metropolitan areas is so high that it would have a displacement effect in households which could not afford to pay this and would have to lay off their domestic workers.

But the proposal from the research is clear, that a household which could not afford to pay this could reduce the domestic worker’s hours in proportion to the household’s ability to pay. In that case, a domestic could be employed by two households each paying R2 500 per month.

On the other side of the spectrum was a view that a NMW of R5 000 per month should be rejected on the basis that it was below a living wage. What proponents of this view failed to appreciate at the time was that a minimum wage dispensation was aimed at creating a “floor” of rights, not a “ceiling”.

Fast-forward to 2018 and, the minimum wage for domestic workers in the major metropolitan areas ranges between R11.89 and R13.05 per hour, depending on whether the worker is employed part time or full time.

I am of the view that the above rate of pay continues to undermine the true value of the contributions domestic workers make to our households, especially given the fact that the employment of a domestic worker enables couples in most households to go out and work and earn two salaries.

However, it should be understood that the above rate of pay was never meant to be a standard against which a reasonable and conscientious employer should be measured. It was meant to be a mere minimum rate, below which even the most exploitative employer would not be allowed to descend.

While discourse about a NMW will always be contested terrain and an ideological battlefield, it would be foolish for society to ignore previous experiences and be indifferent towards outcomes of evidence-based research.

It is my humble submission that, had the department of labour succumbed to the bullying tactics of prophets of doom and failed to implement the sectoral minimum wage 10 years ago, the exploitation of domestic workers would have continued unabated and many domestic workers would still be earning below the promulgated minimum rate.

The current proposal for the NMW is by no means perfect and it is disappointing that the proposed rate falls short of a living wage.

But, given the fact that 76% of our workforce is not unionised, is it not reasonable to expect government to accord protection to vulnerable workers through a mandatory NMW, while unions are still figuring out how to organise these workers to fight for a living wage?

The authors of the NMW report project that should the proposed wage be implemented successfully at the rate of R3 500 per month, an estimated 6.6 million workers who currently earn below the proposed threshold would immediately benefit. Let common sense prevail.

- Ramashia is an advocate of the high court in private practice and a former director-general at the department of labour

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