Shared future: President Cyril Ramaphosa meets DA leader Mmusi Maimane at a function in Kyalami last night. Picture: GCIS
Shared future: President Cyril Ramaphosa meets DA leader Mmusi Maimane at a function in Kyalami last night. Picture: GCIS

The mitigation of job losses that may result from the introduction of the national minimum wage is the collective responsibility of government, business and labour, President Cyril Ramaphosa says.

The National Assembly approved the National Minimum Wage Bill in May.

The South African Federation of Trade Unions (Saftu), the country’s second-largest labour federation, said the proposed minimum pay of R20 an hour, or R3,500 a month, would entrench "the apartheid wage structure". The federation suggested a living wage was R12,500 a month.

The minimum wage proposal will be reviewed yearly, except for domestic and farm workers, whose rate will be set at R15 and R18 an hour, respectively. However, there are fears that the introduction of a minimum wage could lead to wholesale job losses.

DA leader Mmusi Maimane asked Ramaphosa in a written question in Parliament what steps the government would take to mitigate the estimated 715,000 job losses that would ensue as a result of the introduction of the minimum wage, as predicted by the Treasury in November 2016.

Ramaphosa said all the social partners had agreed to the introduction of a national minimum wage as a step towards tackling the challenge of low wages and wage inequality.

"The impact of the national minimum wage on jobs will only be known with certainty in the years following its implementation. At present, there are different estimates of potential job losses, if any. But research has also pointed to potential productivity gains associated with higher earnings and the positive effects of increased household expenditure," he said.

Monitoring the effect of the minimum wage on the economy and on jobs would be one of the functions of the national minimum wage commission that would be established.

"In an instance where a business is put under pressure due to the introduction of the national minimum wage, it is able to apply for an exemption for a period of 12 months.

"The provision for the exemption is contained in the National Minimum Wage Bill and further details are in the regulations that have been published in the Government Gazette on 30 May 2018 ….

"The exemption process is the most important mitigating factor in relation to the implementation of the national minimum wage as it is designed to avoid job losses," he said.

phakathib@businesslive.co.za

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