Critically analyse the feasibility of the minimum wages for domestic workers and
farmworkers, to what extent will this new wage rate have on the level of unemployment
within this people group.
The question around the feasibility of the minimum wage in South Africa varies depending on
who you ask or refer to. Some of the key reasons why the government implemented the
National Minimum Wage in South Africa is to alleviate poverty, reduce the gap between the
rich and the poor and ensuring that South Africans are not paid so little that they may not even
be able to afford the most basic standard of living. (Makhwasane)
Both domestic and farm workers are considered vulnerable in the sense that they may not
have trade unions, or they may not be sufficiently organised to engage in collective bargaining
processes or negotiate minimum wages for themselves.
The national minimum wage bill as it currently sits aims to provide better conditions for
between 4 to 6 million people in South Africa. Domestic and farm employees understandably
welcome that increase in the minimum wages. For many it may actually be an increase in
their salary, especially if they were earning less than the new minimum. Others may be
fortunate enough to already earn above the minimum wage and may not necessarily benefit
in a now increased salary. Employees may now very well be able to improve their standard
of living. And even though the minimum wage is somewhat linked to the inflation rate in South
Africa, each of these employee’s living circumstances are different. (Debbie Budlender, 2013)
The unfortunate part to the farm and domestic worker industry, is that the large majority of
people may not be cyclical workers. Depending on the need in different households and
farms, these workers may only be employed if there is a need. So even if they do earn the
minimum daily rate, if they are not employed for the entire month, they may still be living in
extreme poverty.
Nevertheless, the minimum wage is generally welcomed by these
employees.
For the employers, it may not be good news.
Their wage expenses have increased,
irrespective of whether their income has increased. Employees, whether it be an individual
employing one domestic worker, or an agricultural business employing multiple farm workers,
are obliged to comply with the regulation. If they don’t, they could face fines from the
Department of Labour.
There are 2 things that could happen for the employees. One, they increase the salaries to
comply with the new increased minimum wage, running at a loss or having to cut other
expenses that too could be critical to the company or household. Secondly, they have to
reduce their workforce. On a farm, if you have 10 people working on the farm, the farmer may
be forced to let some of them go in order to pay the remaining employees the minimum wage.
In the case of households, the domestic worker may be laid-off since the employee may no
longer be able to afford the employee.
While the increased minimum wage stimulates the economy, it also results in an increase in
unemployment in South Africa.
On the other hand, even though this regulation is operational, enforcing it may prove more
difficult. As stated before, farm workers and domestic workers may not have any unions
representing them and often are left to engage with employees by themselves. With the
unemployment rate already so high in this country, people are forced to take anything that
they can get just to be able to put food on the table, whether they earn below the minimum or
not. This also, figuratively opens the door for employees to exploit their workers.
The
desperate employee may also not even be aware of their rights and will not report this to the
labour department.
Finding a balance between the need of the employee and their right to a dignified standard of
living and the cost to the employer is key to really be able to appreciate the feasibility of the
National Minimum wages in South Africa. In an eutopia, the employee and employer benefits
and thrives, thereby greatly contributing to the GDP of this country.
(NATIONAL MINIMUM WAGE PANEL REPORT, 2016)
References
Debbie Budlender. (2013). The introduction of a minimum wage for domestic workers in South
Africa.
Makhwasane, A. M. (n.d.). The impact of minimum wages of the market of domestic workers in
South Africa.
NATIONAL MINIMUM WAGE PANEL REPORT, T. (2016). RECOMMENDATIONS ON POLICY AND.