DA proposes independent panel to determine sectoral wages to prevent job losses

21 November 2016

During these trying economic times, when 8.9 million South Africans are jobless, and our economy is no longer creating the work needed to reduce unemployment, an important question to ask when determining whether an intervention is worthwhile must be: will it create jobs?

This is a key lens through which the DA approaches the need for minimum wages, as South Africa battles with the legacy of our painful past and the high levels of unemployment we continue to experience today.

To be clear, the DA supports sectoral minimum wages. They are important to ensure the rights of working South Africans are protected and guarding against the abuse of the most vulnerable members of our society.

The DA further believes that when setting sectoral minimum wages, the peculiarities and challenges of different sectors of our economy should be taken into account.

A one-size fits all approach, no matter how well intentioned, will result in further job-losses adding to the 8.9 million unemployed South Africans.

For example, Agriculture in South Africa is on the brink of collapse. The devastating drought, and lack of support by the National Government, has already seen tens of thousands of jobs shed. This is not likely to end. Mandating a Minimum Wage that ignores this peculiarity will make the situation even worse, hurting the very people who are in need of help during this trying time.

The Deputy President, Cyril Ramaphosa’s announcement yesterday that his proposed National Minimum Wage will include exemptions of some sectors such as Agriculture, and Domestic Workers, for this very reason, is a clear acceptance that a sectoral approach is wiser, especially as we face an economic downturn. Other sectors need to be treated in similar fashion such as the textile industry which faces competition from low priced imports.

The ANC-run government, as it continues to lose the support of South Africans across the country, is again trying to create a red-herring, in an attempt to get away with their failure to grow the economy and create jobs, by introducing much needed economic reforms.

While we must be deeply concerned about the working conditions of so many people in our country, this should not come at the expense of nearly 10 million jobless people who sit outside the economy, away from opportunities.

Given these important considerations, the DA will propose the establishment of an independent panel – that cannot be unduly influenced by politicians, big business or big labour unions - mandated to set minimum wages for each sector, taking into consideration all relevant factors, including the need to create jobs for the 8.9 unemployed South Africans and ensure dignified pay for working South Africans.

This approach would allow, in some sectors, the setting of a minimum wage higher than that proposed by the Deputy President.

We look forward to the public consultation which will follow and to tabling our position so that the best possible outcome is ensured for all South Africans, working and unemployed alike.

Issued by Ian Ollis, DA Shadow Minister of Labour , 21 November 2016