Give the minimum wage report its due

It's better than nothing. You hear that often when it comes to talk around the Sunday braai. Throw in a high unemployment rate and it's a no-brainer. You just can't pay people more. Right?

But read the report, A National Minimum Wage for South Africa. It was released late last year and is the subject of current discussion in Nedlac. In it are some hard facts: 4.6million people who work earn less than R2500 a month; 5.5million people earn less than R3,000 and 6.2million take home less than R3,500.

Almost 12million people live below the food poverty line - how much it costs one person to meet the daily calorie requirement of 2,100 calories, which in South Africa is R445 a month. In many homes there is only one wage earner; in some, not one.

If we are serious about tackling inequality and securing a better economic trajectory, something (or someone) has got to give.

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To quote the report: "The ILO [International Labour Organisation] has found that rising income inequality in SA between 2007 and 2012 occurred because income growth in the bottom decile households had stagnated in real terms, while the incomes in the top decile continued to increase."

Discussions on a minimum wage at Nedlac are gaining traction and there is a push to have it in place by mid-2018. Decisions on what the level will be and who will benefit must of course weigh up the consequences. Not all can be anticipated, no matter how much research is done. But the aim is to ensure it benefits those who really need it.

And therein lies the rub.

Domestic workers are the lowest-paid workers, earning, if their employers are complying with the law, a minimum of R12.42 an hour or R2,422.54 a month in cities.

This is far short of the proposed R20-an-hour or R3,500-a-month national minimum wage, which includes bringing domestic and agricultural workers in line by 2019.

In some countries, domestic workers are excluded but the report says this weakens the national minimum wage as a tool to protect the most vulnerable workers.

And domestic workers are particularly vulnerable because it is close to impossible to organise in this sector, given that the shop floor is private homes. This is why the national minimum wage needs to include the 1.2million people working in private households.

But would the outcome be positive or would the result be widespread job losses?

The report points to the introduction of a minimum wage in the agriculture sector in 2003, which at the time resulted in a 17% hike in wages, sparking the loss of just under 200,000 jobs, which the report says were never recovered.

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But when the minimum wage in the sector was hiked in 2012, after protests among farmworkers in the Western Cape, the effect does not seem have been quite the same, at least in the longer term.

According to StatsSA's Labour Market Dynamics Report 2014, employment in the agricultural sector dropped from 819,000 in 2008 to 644,000 in 2011, reflecting the global financial crisis.

It then ticked up before dropping again between 2013 (when the minimum wage was upped from R69 to R105 per nine-hour day, or R11.66 per hour) and 2014. But according to the 2016 third-quarter Quarterly Labour Force Survey (the most recent data available) employment in agriculture now stands at 881,000 people.

Farm work is seasonal, so job figures will vary, sometimes considerably, but at the very least, recent data shows that employment in the sector has held up.

Drawing domestic workers into a national minimum wage could mean that employers who can't or won't pay the higher rate will reduce working hours but pay the higher rate for those hours worked, and so free up employees to seek other, better-paid part-time work.

Of course, whether such work will materialise is the question no one can really answer.

enslins@sundaytimes.co.za; Enslin-Payne is the deputy editor of Business Times