NATIONAL MINIMUM WAGE: Invitation for public comment: Why bother? by Luthando Nondaba

(Kliek hier om die Afrikaanse weergawe te lees)

Dear employer

Despite approximately 70% of interested parties, including trade unions, having opposed increases to the National Minimum Wage this past year, according to the National Minimum Wage Commission’s own report, the Commission nevertheless persistently proceeded to recommend incremental adjustments to the National Minimum Wage (NMW).

This year, of course, the Commission once again issued a notice inviting all interested parties to submit written representations concerning an ‘investigation’ on possible adjustments to the NMW.

NEASA will not bother to submit representations or participate in what has evidently become a superficial annual tick-box exercise which disregards public input. NEASA will, however, point out the following general comments in respect of the NMW:

• Currently, in terms of prevailing legislation, no person, no matter how desperate, may be appointed at a rate less than the NMW. This leaves millions of potential employees destitute and dependant on meagre government grants in South Africa. A job - even a low-paying job - is better than no job at all!

• A legislated minimum wage does not alleviate the socio-economic plights of South Africans. By contrast, as has been repeatedly submitted and demonstrated to the Commission over the years, it achieves the opposite.

• At the heart of the problem regarding the prescription of minimum wages, is that the more a single employee is legislatively obligated to be paid by an employer, the fewer employees that employer might be able to employ – which in turn increases the burden upon the few people that can find gainful employment.

• The market should dictate the wage which an employer is willing and able to pay its employees and should not be artificially set outside of free market powers by Government.

• Government ignores the simple logic that employers, without exception, only pay wages on the basis of affordability and what they are willing to pay, and that within a market-driven dispensation, employees are paid according to their skills and productivity, which in turn entices employers to compete over valuable employees. If wages were to be naturally established through the aforementioned principles, it will result in an improved wage rate, even higher than what the NMW prescribes, as well as increased employment.

• Government’s interference in the free market leads to wage scales which are not in tune with economic realities and leads to further unemployment, the reduction in working hours or simply non-compliance by employers.

Taking into account the above general comments, we can already see the effects of market-hostile policies, such as the NMW, with the South African unemployment rate steadily increasing year-on-year, having risen to 33.2% in the second quarter of 2025, with the expanded unemployment rate (which includes individuals who are actively seeking employment, as well as those who are available for work but have given up on seeking employment) of 42.9% and an unprecedented youth unemployment rate of 62.4%!

The 2025 Domestic Worker Pay and Working Conditions Report recently revealed that almost 400 000 domestic worker jobs have been lost in the past five years. Although emigration was cited as one of the reasons for the job losses, the report also reveals that the job losses were a result of employers no longer being able to afford their domestic workers.

As a result, whenever the minimum wage is increased, employers have often responded by cutting back on domestic workers. Attempts to raise pay for domestic workers has also led to a decline in hiring, the report revealed.

NEASA remains resolute in its opposition to an imposed NMW as a whole and therefore any adjustment thereto is irrelevant.

Instead of focusing on economic stimulation through policies which are conducive to economic- and business growth, by implementing laws which encourage employment, and which allow citizens to work, earn a living and become productive members of society, Government is hell-bent on persisting with its destructive policies, ignoring citizens and their interests. Clearly, appeasing its voter base and ensuring citizens remain dependant on the state is its socialist modus operandi.

The invitation, therefore, to comment on this ‘investigation’ is an insult to interested parties, especially considering that it is simply ignored by the Commission.

Luthando Nondaba is a Policy Advisor at the National Employers' Association of South Africa (NEASA).

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