GAUTENG
COMMENT, by Pete Bower
MAGAZINE
HOW TO MAKE YOUR PLOT PROFITABLE
Vol 16 No 8
August 2015
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FRONT COVER
.
Bulbs ready for planting
and, inset,
the lovely result when they
flower. See page 12 for our review of
Hadeco’s encyclopaedic
work of South African bulbs.
Exercise in futility
M
uch comment and debate in the media has taken place
recently around the government's proposal to establish an
overall minimum wage in South Africa. And, as one would
expect in such a divided society, the debate has very quickly become
polarised, with a capitalist faction arguing that imposition of a minimum wage will kill
jobs and create more unemployment, and a socialist faction arguing that studies all over
the world (presumably by similarly socialist researchers) have shown that a minimum
wage policy does not result in job losses and to the contrary actually acts as a stimulus.
So at this juncture it may be instructive to observe that in his recent budget, the British
finance minister (quaintly called the Chancellor of the Exchequer) proposed a national
minimum wage for Britons of £9 an hour. An HOUR. For no other reason than it seems
interesting, you might like to note that that is roughly the equivalent of R180 per hour.
South Africa's current system of wage determination is sectoral, with only those industries in which workers are deemed most vulnerable “protected” by a minimum wage.
So, for example, the minimum wage for a domestic worker in Gauteng is currently set
at R476.68 per week (R95 per day or R10.95 per hour), and for a farm worker R601.61
(R120.32 per day or R13.37 per hour).
That's a long way off Britain's R180 per hour and, in fact, a long way off most other
countries that have enacted minimum wage legislation.
And the whole idea, in the current South Africa, is an exercise in futility and nothing
more than a sop to the socialists in government. For, whether one is a socialist or not,
the fact of the matter is that a set minimum wage will only have any real benefit when it
ensures that the lowest paid workers are lifted out of a slave-wage situation ~ out of, in
fact, the poverty-trap.
And the only time that will happen is when the economy is approaching, or has
reached, full employment or, put the other way, no unemployment. Because in the
South African situation, where unemployment currently runs northwards of 36% (and
much more in certain regional pockets) depending on how you define it, there will
always be a potential worker so desperate for ANYTHING that he (or she) will be willing
to work for very much less than even a slave-wage-like minimum wage such as we have
in our sectoral determinations.
But there's another reason why we believe a minimum wage in South Africa is a daft
idea, and that revolves around the old adage of “paying peanuts and getting monkeys.”
For we believe that employers who bumble along paying these ridiculously low
minimums must be suffering from selective tunnel vision which prevents them from
intellectually processing the effects of R120 per day on a breadwinner and his or her
family. How, I ask, can you expect anybody to live on so little money, taking into
account transport, rent, light (in whatever form that may be), water, food, school fees
etc? Project yourself into the position of the R120-per-day recipient and try to allocate
that money in such a way that covers the daily necessities of life. (It can't be done,
which is one of the reasons why 18 million South Africans are forced to rely on social
grants of one form or another within their households to make ends meet. Social grants
which, incidentally, are unsutainably being funded by the taxpayer.)
And then having established for yourself that you are forcing your workers to live in
perpetual poverty, how can you expect those workers firstly to be productiv