Minimum wage keeps people out of work, says jobs plan

25 June 2015 - 02:01 By Matthew Savides

Ditch the minimum wage. This is the controversial call from the Institute of Race Relations, which believes minimum wage laws are pricing people out of the job market rather than into it.The statement is contained in the organisation's "10-point plan for jobs", which was released yesterday. The report, compiled by John Kane-Berman, a consultant at the institute, also includes calls for the strict regulation of strike action and for employers to be allowed to dismiss workers based on their contract and without the interference of the state.Kane-Berman said while the report would probably be labelled "neo-liberal", "neo-conservative" or "right-wing", the need for reform was " compelling".He wrote: "Unskilled people without education or assets have only one thing to call their own: their willingness to work. Yet under current labour legislation they are often not free to use it."Where wages are set higher than employers are able or willing to pay, they will naturally employ fewer people. Yet in a country with unemployment as high as ours, policy should aim to price people into jobs, not out of them."Trade unions argue that higher wages are necessary because employees often have to support so many dependants. But the burden of dependence would diminish if more people could find jobs."Kane-Berman added that a "right- to-work" clause should be inserted into the Bill of Rights to entrench this principle."This is a right that most people take for granted, but which is denied to many people by restrictive labour law and practice."Cosatu spokesman Norman Mampane said: "The implementation of a national minimum wage is a springboard to eradicate income inequality . This is a necessary path that South Africa must undertake. It is essential ."SA Chamber of Commerce and Industry CEO Vusi Khumalo said the minimum wage was a "tricky" issue. While people should not be underpaid, there were cases when people were being paid far more than their worth.He said he supported the idea of a minimum wage, but that it had to be based on extensive research, and be determined and implemented on a sector-by-sector basis...

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