South Africa has the notorious honour of being a country with one of the greatest levels of unemployment and in particular enormous unemployment amongst the youth.  Over and above this it is well known that South Africa is one of the worst in the world when it comes to hiring and firing and unfortunately the education system is not doing anyone a favour when preparing our youth for the job market.

With the above issues borne in mind we now see a serious debate taking place with regard to the introduction of a minimum wage across the board.  Many studies have been done with regard to minimum wages and it appears that some of these studies maintain that a minimum wage will not lead to further job losses.  This may well be true but it is not further job losses that is worrying South Africa.  Our real worry is the creation of new jobs!  It is quite clear in all the studies that a minimum wage will not lead to further job creation.  A minimum wage, if it is not too high, may well be good for those already in jobs but even if the minimum wage is within the realms of affordability this does not encourage future employment and by most calculations it would discourage job creation.

We are already labouring in an environment where we are over regulated and recently our labour legislation has been amended to put the squeeze on temporary employment services and a-typical employment.  Studies around the world have shown that atypical employment is growing and temporary employment service providers are able to place future employees in the job market when those employees would have not been taken up on a permanent basis.  Our labour legislation has effectively ruled out the so called “sweat shops” and has ensured the employees are treated properly and fairly.  This can be applauded.  However, the latest amendments have merely added more restrictions ensuring that businesses and small businesses in particular will try their utmost to avoid creating more jobs.

With our history of job shedding and the non creation of future jobs it appears that our government is hell bent on going ahead with the introduction of a minimum wage across the board.  This will exacerbate the unemployment situation in just about every industry.  It would be wiser, more efficient and clearly within every industry’s interest if the various industries would be looked at individually in order to ascertain what sort of minimum wage was sustainable and what terms and conditions should be stipulated.  It is ludicrous to think that a government would want to compare the minimum wage of a domestic worker to that of an underground miner.  Our legislation should be there to protect the vulnerable but also to ensure that job losses are not increased and that those wishing to enter the job market would at least find an enabling environment for job creation.

MICHAEL BAGRAIM
BAGRAIMS ATTORNEYS

14 JULY 2015