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The debate over the implementation of a national minimum wage has to date entirely overlooked the nonprofit social welfare services sector. As this sector does not buy or sell, generate profit or accumulate wealth, it raises questions different from those being posed by organised labour and the business sector.
These relate to the way its financing is structured and its inability to dictate the amount of money it receives. And unless additional support is received from the government, the introduction of the minimum wage may lead to the loss of services.
SA’s social welfare services are largely provided through a partnership between the government and the nonprofit sector. In practice, the nonprofit sector provides many of these services, with the Department of Social Development allocating subsidies.
Because subsidies are by definition partial payments, organisations are expected to raise the balance of funds from donor organisations, trusts and foundations; corporate social respon...
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