South Africa Reveals $260 Monthly Minimum Wage

Deputy President Cyril Ramaphosa, on thursday, said that South Africa will introduce a national minimum wage of 3,500 rand (261 dollars) per month in 2018, following protracted negotiations between the government and labour unions.

However,  Critics claimed that the new monthly minimum wage  could lead to increased unemployment as employers will be unable to afford higher wage bills.

Credit ratings agencies have said agreeing a minimum wage would help Africa’s most industrialised economy hold onto its investment-grade rating by stabilising the labour market and reducing the number of strikes.

Ramaphosa told a news agency that, “The balance we have sought to strike is that it must not be too low, so that it doesn’t affect the lowest paid workers, but not too high that it leads to massive job losses,”

He went further to say that "Businesses that are unable to afford the minimum wage would be permitted to apply for an exemption of up to 12 months,"

He also made it known that the action would be enforced in 2018,

The Treasury had also thrown its political weight behind the policy initiative.

Nedbank Dennis Dykes, Chief economist said the agreement was a sign of an improving and enhancing relationship between labour, business and government, but warned that its implementation needed to be monitored.

Dykes concluded;