Minimum wage rises by 8.5%

Henry

The national minimum wage rises from 1 March to R27.58 per hour.

The previous minimum wage was R25.42 per hour. This is an increase of 8.5%.

The new minimum wage is in the government Gazette announced.

Agri Western Cape says it is disappointed with the increase.

“We are disappointed that the minimum wage commission did not take into account organized agriculture’s recommendation to increase the minimum wage in a sustainable way,” says Jannie Strydom, CEO of Agri Western Cape.

The agricultural organization pleaded with the commission to consider job creation, the preservation of current job opportunities and the financial implication on companies as the core priority during the review of the minimum wage.

“We therefore commented that the increase should be considered in relation to the inflation rate,” says Strydom.

“Agri Western Cape supports a sustainable living wage, but an increase above inflation cannot be justified. Producers are price takers whose cash flow is already under enormous pressure.

“Although many permanent Agri workers already earn more than the minimum wage, agriculture cannot afford annual increases above inflation in one production input,” says Strydom.

“This will contribute significantly to the cost squeeze.”

TLU SA, the South African Parastatal and Tertiary Institutions Union (Saptu), the National Employers’ Organization (Neasa) and the agricultural organization Saai insisted just earlier this month that the labor department reconsider the existing policy on minimum wage.

These four organizations have consistently objected to the concept of a regulated national minimum wage, and say South Africa’s unemployment crisis requires a very different approach.

Although the agricultural sector has shown remarkable resilience in the face of numerous crises, especially the lingering effects of the Covid-19 pandemic, the pressure on the sector is starting to show.

Where the sector grew by 17.8% in 2020, it grew by only 7.4% in 2021 and a marginal 0.9% in 2022. The slower growth rate is reflected in the labor statistics released by StatsSA this week, which showed a quarterly increase of 0.8% in employment in the agricultural sector.

The organizations believe that employers – especially in the agricultural sector – are getting the wind from the front due to policies, including those on minimum wage, which the government imposes.