World Economy

Mixed Reaction to Minimum Wage in South Africa

Mixed Reaction to Minimum Wage in South Africa Mixed Reaction to Minimum Wage in South Africa

South Africa’s union rivalry came to the fore again this week when the country’s labor unions reacted differently to the R20 ($1.41) an hour national minimum wage approved by the cabinet.

The country’s largest labor federation, Cosatu, welcomed the policy, which will be implemented in May, but quickly warned it would become redundant if the government failed to implement its requirements,Fin24 reported.

 “What we want to see now is some leadership from the government’s side to make sure that the labor department is prepared for the rollout of the minimum wage,” spokesman Sizwe Pamla said. “While we have about 15 million workers in the country, the department has 1,000 labor inspectors. We need more labor inspectors.”

However, the rival South Africa Federation of Trade Unions, rejected it, charging that it sought to formalize poverty wages. Saftu, which is led by expelled Cosatu general secretary Zwelinzima Vavi, said the minimum wage was bad for the country. Acting spokesperson Patrick Craven said the proposed hourly rate was “outrageous”.

“The leaders who are presiding over the economic mess the country is now situated in are going to get huge increases on their already substantial salaries, while workers are living in poverty,” Craven said. But Cosatu hit back, saying that the minimum wage was different from the living wage.

“In fact, this whole thing risks becoming another redundant policy if government doesn’t address the labor department issue,” Pamla said. Cabinet this week approved the National Minimum Wage Bill following recommendations from the National Economic Development and Labor Council that workers be paid R3,500 ($246) per month for a 40-hour week and R3,900 for 45 hours. The bill will now be referred to parliament for further deliberation. If passed, it would be implemented in May.

Fedusa general secretary Dennis George said the federation welcomed the bill, adding: “That’s exactly what we have agreed on at the National Economic Development and Labor Council.

“This will help us reduce inequality and poverty. Income is very important for the working people. “This will help stimulate the economy because more consumers will be able to spend more money on the economy.”

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