Ramaphosa punts minimum wage

SOUTH Africa should embrace a national minimum wage in order to avoid a downgrade to junk status from international credit agencies, Deputy President Cyril Ramaphosa has said.

Ramaphosa said an agreement on a minimum wage – embraced by government, labour, and the business sector – was one of the key things rating agencies Fitch and Standard and Poor’s, had asked about during their assessment visit this week.

“They wanted to know what progress we are making and they wanted to know about the issue of strikes and strike balloting and whether these were part of the possible agreement. We said they would be,” said Ramaphosa at labour federation Fedusa’s national congress in Joburg.

He said the country was closer to delivering a national minimum wage, with the team of expert advisors about to present a report at the National Economic, Development and Labour Council (Nedlac) tomorrow.

Ramaphosa’s revelation confirms earlier reports from some Nedlac actors that South Africa’s astronomical levels of inequality are a growing cause of alarm for ratings agencies and international investors, leading to a consensus over the need for a minimum wage and other policy interventions.

The report will make recommendations on the contentious issue of where the minimum wage should be pegged. Labour and business remain far apart on this issue. Ramaphosa’s expert panel is likely to endorse a minimum wage level far lower than the monthly R4 500 demanded by labour.

Talks at Nedlac will also discuss labour stability, which will include an agreement on the contentious matter of strike balloting and pickets.

Despite Ramaphosa’s upbeat stance, it is unlikely that the national wage will embrace all workers initially. South Africa’s most vulnerable employees, domestic and farm workers, will likely be excluded.

Ramaphosa said the implementation of a minimum wage was part of a package of a broader social compact that was needed to kick-start growth and development.

Good leadership, tackling corruption and accountability were also needed to steer the country in the right direction.