Ramaphosa concedes R20 is not a living wage

8 February 2017

Cape Town – Deputy President Cyril Ramaphosa said the R20 an hour minimum wage agreement is not a living wage.

Addressing media at Parliament on Wednesday, Ramaphosa said the agreement was a starting point to lift 6.6 million workers who are earning below R3 500 a month out of poverty and inequality.

Ramaphosa and members of the  National Economic Development and Labour Council Nedlac - except Cosatu - signed the agreement on Tuesday. Ramaphosa said it was not "his" agreement that he "sucked out of thin air", but follows two years of engagement with three labour federations, business leaders and community organisations.

"This is an historical development in our country,” he said. “Finally we have a national minimum wage: a national minimum wage which no doubt won’t make everyone happy and excited; a national minimum wage which is going to lift the income levels of no less than 6.6 million workers who currently are bellowing R3 500.

“Yes, it could have been lifted to any number you choose,” he said. “But this would have had dire consequences with a huge loss of jobs.

“It is a balance to provide a platform to improve income levels of our people,” he said. “Let me stress: this is not a living wage. This is not meant to be a wage people can live on.”

Ramaphosa has been widely criticised for the low wage, with the National Union of Metalworkers of South Africa (Numsa) saying it was not even enough for the deputy president’s dog to survive on.

Numsa general secretary Irvin Jim said the amount is a “slave wage”.

However, Ramaphosa said he preferred being criticised for doing something as opposed to not doing anything at all to start the process of combating inequality, unemployment and poverty.

“We had to start somewhere to create balance and play it safe,” he said. “We are criticised all round for it, but hey, it is better to be criticised having done something instead of being criticised for doing nothing.

“I have been lambasted and called all sorts of names,” he said. “We are doing this for 6.6 million lives. It won’t be improved by slogans and people standing on podiums saying that lives will be improved.”

He quelled concerns from labour and business.

From a labour perspective, he said, there is a provision which rules that businesses can’t change their hours or conditions of employment due to the national minimum wage.

From a business perspective, he said businesses can apply to be exempt from the minimum wage.

This article first appeared on Fin24, see here.