1 MILLION job losses predicted under new minimum wage laws

Industry experts are predicting around 1 million jobs could be lost as a direct result of new minimum wage laws.

The South African Federation of Trade Unions (Saftu) has condemned the introduction of the R20 per hour minimum calling it a 'slave wage'.

Lawyer Michael Bagraim says the move is likely to cause massive job losses because employers might not be able to meet this criteria and therefore resort to retrenchment.

Read: R20 an hour is an insult to workers - Vavi

If we are going to lose a million jobs in our economy, it means people who will be in the labour force might have to look after 7 other people and that doesn't take them anywhere.

Michael Bagraim, labour lawyer at Bagraim Attorneys

We saw this about 4 years ago when Minister Olifant raised farm workers wages by almost 50% and the farmers retrenched one third of their workforce in order to meet the legislation.

Michael Bagraim, labour lawyer at Bagraim Attorneys

On Tuesday labour minister, Mildred Oliphant presented the National Minimum Wage Bill, the Basic Conditions of Employment Amendment Bill and the Labour Relations Amendment Bills to the National Assembly.

All legislation must now be sent to the National Council of Provinces (NCOP) for concurrence.

Bargraim adds that South Africa already has a number of labour laws in place, but says they are rarely effected because most workers do not understand the scope of the legislation, meaning employers are able to break the law with no fear of retaliation.

Meanwhile labour analyst and columnist at Fin24 and City Press, Terry Bell agrees that there will be job losses but not because of the minimum wage laws.

There would be large job losses, but that won't be because of the R20 minimum wage, but the ongoing mechanisation of various industries.

Terry Bell, labour analyst and columnist at Fin24 and City Press

To hear more of this debate on labour legislation, listen below:


This article first appeared on CapeTalk : 1 MILLION job losses predicted under new minimum wage laws


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