In the same week that SA’s unemployment rate topped 27%, an expert panel proposed that the country introduce a minimum wage of R3,440/month. Panel chairman Prof Imraan Valodia says he is "confident" that, at this level, the negative impact of job losses will not exceed the positive gains for low-paid workers.Only, it’s an impossible claim to make, given that the panel makes no explicit economic or welfare findings. The panel’s problem was that, from the outset, it faced two irreconcilable bodies of research — from Wits and UCT.Wits claimed that a minimum wage starting at R3,500/month could reduce working poverty and inequality. It said there would be few job losses because higher wages would boost consumption and output, while firms would adjust by raising their productivity and prices.On the other hand, UCT warned of significant "disemployment". A wage of R3,400 could cause more than half a million job losses, it cautioned.The panel tried to embrace both approaches, accepting the e...
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