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Minimum wage not responsible for job losses – CCMA

Publish date: 06 November 2019
Issue Number: 311
Diary: Legalbrief Workplace
Category: Labour

The introduction of the national minimum wage (NMW) of R20 an hour has not caused major job losses, nor have firms flooded the Labour Department looking for exemptions. However, it may have discouraged the hiring of new entry-level workers. The Financial Mail says of the 19 500 claims received by the CCMA so far this year under the Basic Conditions of Employment Amendment Act and the NMW Act, only 1 823 (9%) relate to the NMW Act alone. Most of these are for firms not raising wages in line with the NMW, or for making unilateral changes to the terms and conditions of employment as a result of the NMW. Only 94 claims (0.5% of the total) involve dismissal disputes. Assuming one claim per worker, this means that fewer than 100 workers claim to have been unfairly dismissed since January this year because of the introduction of the NMW. However, labour economist Neil Rankin suggests there may have been so few job losses because most of SA's small-firm, low-cost manufacturing jobs have already been wiped out thanks to competition from cheap Chinese imports, outsourcing and the unfair extension of central bargaining agreements struck between big business and big unions to small firms. So far, 519 firms have applied to the department for exemption from the NMW. It has granted 323 (62%) of these claims and refused 160 (30%), with the rest either pending or withdrawn. Business Unity SA convener Kaizer Moyane says member firms have not expressed much concern over the policy's implementation.

Full Financial Mail report