LETTER: National Minimum Wage Act a culprit in SA’s soaring unemployment

Xolile Mpini hits the nail on the head (“National Minimum Wage Act and commission have damned the unemployed”, February 20).  I have enormous sympathy for the plight that he outlines not just for himself, but also for all South Africans who are desperately looking for any sort of job. Unfortunately, today over 75% of the youth are unable to find any paid work at all. Clearly, one of the culprits is the National Minimum Wage Act.

It should be mentioned that there are literally thousands of businesses that are ignoring the national minimum wage and employing people on packages less than the minimum requirement. The department of employment & labour is fully aware of this, and knows it cannot stop this practice. One of the real evils of the National Minimum Wage Act is that once an employer feels that the only way they can employ someone is by paying below the minimum wage, it opens the door for the employer to avoid compliance with all the other labour legislation. 

Whereas before the minimum wage an employer would do their utmost to ensure employees were registered with the Unemployment Insurance Fund and Compensation Fund, they are now forced into a situation where they can’t register those individuals because they are earning below the minimum wage. 

They are also forced into a situation where they probably won’t set up a provident or pension fund, and they certainly won’t regularise the employment relationship by a contract of employment or letter of appointment. The fact that they can’t afford the minimum wage tends to “throw the baby out with the bathwater”.  In essence, such legislation is forcing thousands of employers to break the law to ensure their business survives.

In SA today we need to create employment, not set up obstructionist laws and regulations. All of us should hear the message of the Langeberg Unemployment Forum loudly and clearly.  These are individuals who at this point just want to get a foot in the door to gain some skills and start working immediately. 

The problem we are facing is that the true minimum wage in SA, partially because of the National Minimum Wage Act, is what unemployed people earn — zero rand per hour.

Michael Bagraim, MP
DA labour spokesperson

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