In March 2020, the Department of Employment and Labour introduced a new minimum wage rate for workers employed on the Expanded Public Works Programme (EPWP). The new rate, R11.42 per hour, is in line with the Basic Conditions of Employment Act and subject to an annual review. It isn't much but it’s better than nothing, a fate faced by so many South Africans desperately seeking work.
South Africa's already high rate of unemployment stands officially at around 29.1%. This figure excludes those who have given up looking for work (expanded rate), but includes the hundreds of graduates and experienced people searching for employment, but with no luck and with fewer jobs being available. Forcing an employer to pay employees a regulated amount would only increase the number of unemployed people. The amount paid for work should be an agreement between the two parties involved. This is not promoting exploitation, no one advocates that, but jobs are so scarce that no one should be compelled to reject a job because the pay is lower than the minimum wage.
In his video 'Is raising the minimum wage a bad idea?' American economist Professor Don Boudreaux, author and co-director of the Programme on the American Economy and Globalization at Florida’s George Mason University, explains how the minimum wage is actually hurting the economy instead of improving an employee's chances of getting and maintaining a job. He argues that the minimum wage cuts the number of jobs available and that those most affected are the poorest people and usually the last hired, hence the saying "last one in. first one out". When a company can no longer afford you, they let you go. Companies also fire you when they deem you to be the least productive employee, therefore those who are disadvantaged are the ones who suffer more job losses.
Boudreaux explains a basic law in economics: when a price goes up, people buy less of the good. Likewise, the law of demand also affects the market for low skilled workers. If the minimum wage means a higher cost for each employee, it makes each worker less affordable. Like a coffee shop, the owner will not keep a worker they cannot afford.
The reality is raising the minimum wage causes more people to compete for the same job. For example, a job that was once unappealing to the public, will suddenly draw more applicants if a higher salary is offered.
Getting a job is the means and opportunity to provide for your family, especially when you have been searching for a long time.
A job is also an agreement between a worker and an employer about the work terms and conditions. A worker does not sign a contract just because the salary is right, but also because it offers an opportunity for them to better their lives.
In a small town in the southern part of the Free State, Bethulie, my hometown, many youths take part in Community Worker Projects (CWP) which form part of the Expanded Public Works Programme (EPWP). The projects' aims are to eradicate poverty and eliminate inequality and discrimination in the workplace.
These projects hire people who are desperate for jobs, some with a matric certificate and others without because circumstances prevented them from getting the chance to finish school.
It is difficult to get a job when you have a university or school qualification. Imagine what it’s like when you don’t. How do you even begin to compete no matter how bright, enthusiastic or willing to learn? These projects do not meet the requirements of the minimum wage, which is R3500 a month. The wage on these projects range from R700 to R2000, depending on the skills the worker has and the task in hand.
Started in 2016, the CWP projects introduces young people to field work and an eight hour working day. By the end of the contract, workers have obtained transferable skills free of charge. Supervisors even volunteer to train their co-workers to gain the necessary skills needed for a particular job.
The youth of Bethulie participate in these skill development projects because times are tough and jobs almost non-existent. Therefore, when you have mouths to feed, there isn’t much choice to be picky. "You wait for the perfect job with another one".
If everyone employed by the CWP protested against the amount they earn and demanded the minimum wage, many families would be starving because no one would be working and no longer earning that mere R700. Is that really how it should be?
R700 is not a big amount of money, but to a struggling family, it puts food on the table. By introducing the minimum wage, the alternative is not more money, but none at all.
This article was first published on City Press on 15 September 2020