Cabinet approves minimum wage bill

Adrianax said:
Minimum wage works perfectly in a country where the economy is strong, businesses soaring and the majority of the population is employed with a reasonable income. It is a disaster in a country where most businesses are either scaling down, leaving the country or closing down in total, where the economy is on the brink of a collapse and where unemployment is an increasing figure.
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+100
Now, how do you teach that to the low IQ politicians?
 
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Making a significant percentage of employment illegal is exactly what a sickly African economy could do without.
 
businesses already adjusted their prices accepting this to happen.
 
Adrianax said:
Minimum wage works perfectly in a country where the economy is strong, businesses soaring and the majority of the population is employed with a reasonable income. It is a disaster in a country where most businesses are either scaling down, leaving the country or closing down in total, where the economy is on the brink of a collapse and where unemployment is an increasing figure.
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ɹǝuuᴉM said:
+100
Now, how do you teach that to the low IQ politicians?
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One of my final year economics assignments was concerned with the possible effects of a national minimum wage. At the time there were some politicians in the news discussing it.

Most of the conclusion if you're interested (I emboldened what I think is the most relevant bit):

"Both sides in this argument over a national minimum wage have valid concerns. Over half of South Africa’s population is below the poverty line with few prospects for the future. At the same time, South African businesses must be able to operate competitively and earn profits, so that employment opportunities may exist for workers and so that the economy may function. Not introducing a national minimum wage will do nothing for the millions of workers currently suffering from exploitation, but introducing a minimum wage that is too high above the market clearing rate will severely impair the ability of the unemployed to find employment.

A conservative approach to the introduction of a national minimum wage would be ideal, as it is very unlikely that South Africa’s Gini coefficient will decrease by further constraining the supply of low-skilled jobs. The national minimum wage should perhaps be seen as a simplification of the existing minimum sector wages rather than an opportunity to miraculously pull half of the country’s population out of poverty. There are no quick fixes when it comes to a complex issue such as income inequality and a strong argument has been made against placing too much responsibility on a national minimum wage rate, as it can decimate employment levels if set inappropriately.

The cautiousness with which the ANC has approached the topic of a national minimum wage suggests that government is aware of the damage that will result by nonsensically attempting to sacrifice job creation for poverty alleviation. Hopefully the government will end up adopting an uncontroversial national minimum wage that does not jeopardise job creation by introducing negative shocks into the economy."


A random statistic from that report:

"A study by Bhorat et al (2012) found that after wages rose by 17% in the agricultural sector in South Africa as a result of an increase in the sectoral minimum wage, the number of farm workers fell by 200 000, or over 20%, in less than a year."
 
Adrianax said:
Minimum wage works perfectly in a country where the economy is strong, businesses soaring and the majority of the population is employed with a reasonable income. It is a disaster in a country where most businesses are either scaling down, leaving the country or closing down in total, where the economy is on the brink of a collapse and where unemployment is an increasing figure.
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I first assumed that minimum wage would work well for you. Then it dawned on me that you're probably unemployable anyway.
 
vigras rojara said:
I first assumed that minimum wage would work well for you. Then it dawned on me that you're probably unemployable anyway.
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Rather than make a fool of yourself, why not substantiate any claims you'd like to make to the contrary?
 
Big prob with minimum wage, is the young fresh out of school person. The non university candidate.

The first job, is the education on how to work, and which direction that person wants to follow. At 18/19 years, probability still living with parents, no dependants, clueless about the big world.

Now you have to pay them a living wage not a learning wage.

Life just became tougher for the young.
 
vigras rojara said:
I first assumed that minimum wage would work well for you. Then it dawned on me that you're probably unemployable anyway.
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Whatever you say, if it would make you feel better under your skin.

But, here is the reality. I had a domestic worker employed on a full-time basis 5 days a week. She did not earn much back then, but I paid her R6000 a month. When they started with minimum wage laws I let her go and offered her the opportunity to come in twice a week for half-day work - scaling down her weekly income from 5 days work to only a single day's work. She refused and left. Since then I made use of temporary workers.

I never let her go because of the amounts I paid her, since I paid her much more than the minimum wage. The reason I let her go is the fear the law instilled. The punitive measures - should I myself one day run into financial difficulties - and all the other laws protecting workers. I did not want to commit myself to any such thing and rather decided to keep my R6k a month I paid her and do most of the work myself.

Fact is, this is the reality South Africa is facing. People are ending up unemployed or finding themselves employed in part-time contracts with lower salaries - not because of salaries paid, but rather due to the way laws are made and enforced.

Yes, I do agree, here and there you may find the few companies paying people less than minimum wage. I agree, take them on, but they are in the minority. The problem is, these laws are combing a company and the average middle-class man under the same brush and threatening them with the same punitive action. This is the wrong way to go about this.

If this is what you want for your people, then I say go right ahead. Implement these laws.
 
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Adrianax said:
Whatever you say, if it would make you feel better under your skin.

But, here is the reality. I had a domestic worker employed on a full-time basis 5 days a week. She did not earn much back then, but I paid her R6000 a month. When they started with minimum wage laws I let her go and offered her the opportunity to come in twice a week for half-day work - scaling down her weekly income from 5 days work to only a single day's work. She refused and left. Since then I made use of temporary workers.

I never let her go because of the amounts I paid her, since I paid her much more than the minimum wage. The reason I let her go is the fear the law instilled. The punitive measures - should I myself one day run into financial difficulties - and all the other laws protecting workers. I did not want to commit myself to any such thing and rather decided to keep my R6k a month I paid her and do most of the work myself.

Fact is, this is the reality South Africa is facing. People are ending up unemployed or finding themselves employed in part-time contracts with lower salaries - not because of salaries paid, but rather due to the way laws are made and enforced.

Yes, I do agree, here and there you may find the few companies paying people less than minimum wage. I agree, take them on, but they are in the minority. The problem is, these laws are combing a company and the average middle-class man under the same brush and threatening them with the same punitive action. This is the wrong way to go about this.

If this is what you want for your people, then I say go right ahead. Implement these laws.
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I call BS on you claiming to pay someone 6k and then "fearing" a law that would never apply to you. Even if you ran into financial difficulty, and paid minimum wage, you would be saving nearly half of what you claimed to pay.
 
sox63 said:
I call BS on you claiming to pay someone 6k and then "fearing" a law that would never apply to you. Even if you ran into financial difficulty, and paid minimum wage, you would be saving nearly half of what you claimed to pay.
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We did the same.
I rather have a cleaning service twice a week than having to deal with UIF and all that jazz. Now I pay much less and its not my problem.
 
Adrianax said:
Whatever you say, if it would make you feel better under your skin.

But, here is the reality. I had a domestic worker employed on a full-time basis 5 days a week. She did not earn much back then, but I paid her R6000 a month. When they started with minimum wage laws I let her go and offered her the opportunity to come in twice a week for half-day work - scaling down her weekly income from 5 days work to only a single day's work. She refused and left. Since then I made use of temporary workers.

I never let her go because of the amounts I paid her, since I paid her much more than the minimum wage. The reason I let her go is the fear the law instilled. The punitive measures - should I myself one day run into financial difficulties - and all the other laws protecting workers. I did not want to commit myself to any such thing and rather decided to keep my R6k a month I paid her and do most of the work myself.

Fact is, this is the reality South Africa is facing. People are ending up unemployed or finding themselves employed in part-time contracts with lower salaries - not because of salaries paid, but rather due to the way laws are made and enforced.

Yes, I do agree, here and there you may find the few companies paying people less than minimum wage. I agree, take them on, but they are in the minority. The problem is, these laws are combing a company and the average middle-class man under the same brush and threatening them with the same punitive action. This is the wrong way to go about this.

If this is what you want for your people, then I say go right ahead. Implement these laws.
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You have the same issue in France, large companies do not hire full time employees anymore, they make use of «*consultants*», which is essentially a form of labour broking or they stick you onto a temporary contract. This is also applicable to professionals like engineers. It is simply to costly to get rid of people.

The simple principle is that if you can’t fire then you can’t hire.
 
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Nicodeamus said:
You have the same issue in France, large companies do not hire full time employees anymore, they make use of «*consultants*», which is essentially a form of labour broking or they stick you onto a temporary contract. This is also applicable to professionals like engineers. It is simply to costly to get rid of people.
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You are correct, and like Mila mentioned above, we did not take our decision lightly. Our domestic worker was employed with our family for more than 15 years. There were just too many laws coming out that would make it too costly, difficult and in cases impossible to scale down should we ever get into financial difficulties. Over and above that, we feared a time when you get a government that simply comes out stating minimum wage would be R10k and that is that. So, for us it never was about the money we paid, but the laws. I am glad we took the decision, although it negatively affected our domestic worker. And, somehow, I do not think we are the only people who took actions for the same reasons.
 
Mila said:
We did the same.
I rather have a cleaning service twice a week than having to deal with UIF and all that jazz. Now I pay much less and its not my problem.
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Oh well, its up to you. I didn't take "UIF and all that jazz" to be an issue for me personally. At least if I can't afford her services anymore, she could get some money while searching for another gig.
 
sox63 said:
Oh well, its up to you. I didn't take "UIF and all that jazz" to be an issue for me personally. At least if I can't afford her services anymore, she could get some money while searching for another gig.
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She got UIF when she left. I just do not want hassles anymore.

In my opinion professional cleaning services is the way forward. IT will stop people form underpaying staff and the benefits a big company can give staff is much more than a single employer.
I get what I want on the other hand. IF there is a taxi strike or her children is sick It's not my problem. I still get what I paid for.

If something goes missing in my home I have a company I work with not a human.
IF she feels she is mistreated she goes to her company and they deal with me.
 
It is very clear the government has no desire to turn the economy around.
 
I had to retrench our domestic worker recently due to money and law concerns.
Unfortunately I can pay slightly above the minimum wage and the new increase of +-R1000 is significant.

Fortunately her UIF will still pay so at least the worker can have peace of mind, keep in mind that you have to pay a retrenchment package and it's 3 month notice if the worker lives on your property.
 
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