Afrika Tikkun, a youth development organisation, has expressed worry over the government’s intention to raise the national minimum wage by 8.5% to R27.58 per hour, beginning on March 1, 2024.
While the rise will improve the quality of life and dignity of the lowest earners, Afrika Tikkun emphasises the possible implications, particularly in a country with extremely high rates of youth unemployment and job losses.
“A blanket minimum wage increase, though well-intentioned, poses challenges for businesses, especially for small, medium, and micro enterprises (SMMEs), which are the lifeblood of South Africa's economy,” said the chief executive of Afrika Tikkun, Onyi Nwaneri.
Nwaneri also highlighted the importance of striking a fine balance between reducing inequality and promoting an atmosphere conducive to employment growth.
“Expensive labour and stringent labour policies hinder job creation and will hamper the country's efforts to provide access to the economy, this will ultimately counteract the government’s goal of reducing dependence on welfare.”
The organisation also urged the government to carefully consider the potential effects of the minimum wage increase on job creation and economic growth.
It urged policymakers to look into alternative measures that strike a balance between improving living standards and fostering an environment conducive to long-term business development.
According to a government gazette, this salary hike applies to domestic and farm workers.
This implies that if the lowest-paid worker worked eight hours a day, 20 days a month, the new minimum wage would effectively raise monthly earnings to around R4,412.80.
IOL