Law requires wage of R27.58/h
while government only pays R15.16/h
to workers in state programmes
BRITS POS – BRITS - It’s election year and we recognise that rational decisions aren’t being made, but rather populist and emotional ones.
This is clearly the case with the announcement of the new minimum wages that will take effect on 1 March 2024. Instead of focusing on job creation, the ANC is using an increase in minimum wage to buy votes.
TLU SA questions whether the comments that were submitted were even read and whether logical, rational arguments regarding the establishment of a minimum wage were considered and takes a stand against the decision.
Business owners are striving for profitability in extremely difficult circumstances, largely due to the government’s incompetence. Now the law requires an hourly wage of R27,58. However, the government itself only pays R15,16 per hour to workers participating in its state programmes – an amount that is close to a starvation wage if living costs are taken into account. It seems easy for them to expect others to meet requirements they are not willing to adhere to themselves. This while South Africans’ tax money is being used to pay state workers.
The question therefore arises, how are we expected to obey legislation when the government itself cannot even do so?
Entrepreneurs constantly focus on being profitable. After all, that is when a business is considered successful. They have to manage production factors, namely natural resources, entrepreneurship, labour, and capital, to achieve success.
Traditionally, only the aforementioned four productive factors had to be considered, but today, technology has become the fifth factor. Increasingly it is being considered to replace labour with machines.
The 8.5% increase in minimum wage will lead to more retrenchments.
Who speaks on behalf of the unemployed?
“TLU SA has consistently asked the government who speaks on behalf of the unemployed,” says Bennie van Zyl, TLU SA General Manager. “With the ever-increasing rise in unemployment numbers, the responsible choice would have been to allow market forces to regulate employment.”
The recent announcement will force businesses to make urgent decisions about their labour force to remain competitive. The question then is whether the government is truly helping employees with a minimum wage, if it may lead to job losses.
Every entrepreneur must consider their own sustainability. Labour can be replaced with technology.
“It is discriminatory for the government to set a minimum wage for workers who are already employed. The lower category worker is sacrificed as mechanisation is now becoming the only way for productive progress,” says Erika Helm, chairman of TLU SA’s local government committee. “It is regrettable that the government’s short-sightedness will lead to more retrenchments.”
In agriculture, this too will mean that farmers will have to adjust. To improve productivity, they will have to consider mechanisation.
Should the government not focus on stimulating business growth and curbing corruption, the country will be facing a disaster. The private sector should also be allowed to do business freely in accordance with market-oriented economic principles and without excessive restrictions.
TLU SA puts it to the government that their approach to managing labour is not in the best interest of sustainable businesses. Workers who take their responsibility seriously do not need a minimum wage. They will be compensated far above minimum wage. The focus should rather be on skills development and training, enabling skilled workers to play a positive role.
