The impact of the National Minimum Wage after one year

The jury is out on how much it is really improving people's lives.

One year after the introduction of a National Minimum Wage, there aren’t too many signs that it has the overall positive impact that its supporters expected. Since 1 January 2019, the NMW was set at R20 an hour for general workers, R18 for farmworkers and R15 for domestic workers is not going to be enough to change the low-wage trajectory. 

However, the latest data from the Pietermaritzburg Economic Justice & Dignity Group shows that this is simply not enough.

“Even in the best case minimum wage scenario (R20/hour) the average worker will only take home R3,360 a month – and when factoring in the cost of food, transport and electricity, the household is already left with a R780 deficit,” it reads.

“In most Black South African households, only one family member works. This one wage must support, a reductive average of 3.9 persons in November 2019. The baseline wages remunerated to most Black South African workers are very low. Divided by 4 persons, the wage becomes a poverty wage,” 

The NMW can be reviewed each year and this has given impetus to  unions calling for the minimum wage level to be increased but the problem with that is that the  National Minimum Wage Commission, whose responsibility it is to assess and review the wage each year, does not have enough data to work. It primarily relies on data from Statistics SA which, unfortunately, has a lag of almost a year so they will only be able to see last year’s impact of the NMW in late 2020.

Furthermore, the Mail and Guardian last year reported that there were over 360 employers, employing over 42 000 workers, who applied to be exempt from the R20 an hour national minimum wage citing a presentation by the employment and labour department wherein 231 exemptions were granted. 

Reads the article: “The exemption may not be granted for longer than one year and must specify the wage that the employer is required to pay workers. The presentation reveals that the highest number of exemption applications (110) came from non-profit organisations. The second-highest number of applications (80) came from the manufacturing sector.”