LETTER: Minimum wage will encourage employers to form cartels

SA has become a welfare state, to the point where a turnaround from this would be impossible, so we definitely do not need a basic income grant. Better faring countries have a lot fewer people depending on grants because people are either employed or running their own businesses.

Yes, unskilled workers need protection from exploitation by employers, but we need to consider our low productivity levels, along with a large portion of job seekers who are unskilled. Making unskilled labour expensive will not get us out of the low-growth environment we find ourselves in.

How will a minimum wage help when it indirectly encourages employers to form a cartel in the sense that they no longer need to outbid each other to acquire unskilled labour? What does the department of employment and labour expect the employer to tell employees they have to let them go so employers can afford to comply with minimum wage laws?

Employers should be able to employ at the wage rate job seekers are willing to work for, and equally, job seekers should have a right to accept or reject an employer’s offer. What SA needs is a relaxation of labour laws and the creation of an environment that allows small business, both formal and informal, to thrive.

The multiplier is fewer people on grants and more people paying taxes (direct and indirect) to finance the other intervention measures we desperately need: measures such as empowering people by skilling and providing them with opportunities to earn a living, instead of condemning them to state dependency.

Motodi Maseloane
Via email

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