The South African National Minimum Wage Conundrum: Equality vs Growth?

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The South African National Minimum Wage Conundrum: Equality vs Growth?: Abstract

On February 8 2017, parties to the National Economic Development and Labour Council (NEDLAC) signed an agreement on the introduction of a national minimum wage (NMW). The only party that refused to sign the agreement initially was the Congress of South African Trade Unions (COSATU), but it subsequently signed on 2 March 2017.

There had been long and often-heated debate around the question of an NMW. With a Gini coefficient of 0.66, South Africa had one of the highest rates of inequality in the world, and a great number of people living in poverty. Indeed, just over half the population lived on less than R1 036 per month, and 47% of the workforce earned less than R3 500 per month. The government saw the NMW as a positive intervention that would address income inequality in the country and help to overcome poverty.