Minimum wage and the cycle of desperation + exploitation

minimum-wage

This was republished on Huffington Post SA

When Cyril Ramaphosa announced that there was a proposal to raise the minimum wage to R3500 per month, there was a very mixed reaction. The proposed minimum wage has drawn criticism from a wide number of sources, ranging from those who argue that R3500 p/m is too low to survive on with others arguing that it is too high and will lead to job losses as many employers won’t be able to afford the new wages.

The debate around minimum wage is a complex issue for a number of reasons. Firstly, I have to agree with critics such as the EFF who argue that R3500 p/m is simply too low. According to some experts, the average South African would need to earn R12000 to sustain a basic household, and this is believable. Once costs such as transport, housing, food, child related expenses, among other factors have been taken into account, a salary of just R3500 p/m seems less and less realistic. It is also impossible to divorce the low minimum wage from the fact that South Africa has one of the highest income gaps in the world. We are currently living in a country in which cashiers at Checkers earn a pittance while their CEO collected a bonus of R100 million.

What makes this more distressing is the fact that an estimated 47% of South Africans earn less than R3000 p/m. In fact, when scrolling through the minimum wage hashtag on Twitter, I was alarmed by the amount of people complaining that the minimum wage being so high meant they wouldn’t be able to afford their domestic workers, and more still vehemently defending paying their domestic workers as little as R1500 p/m. The amount of entitlement that I witnessed towards domestic help, as well as the fact that suggesting that those who cannot pay their full time domestic help a livable wage should perhaps consider not having full time domestic help being seen as a radical statement, made me realise the extent that exploitation of poor black people is normalised in South Africa.

However, the claim that raising the minimum wage could lead to job losses is not an incorrect one. According to the National Treasury, increasing the minimum wage to R3500 p/m could lead to an estimated 715 000 jobs being lost. This indicated two key issues: that there are thousands of employers across the country who are not only happy to pay their employees slave wages but whose business models may depend on it, and that there  are thousands of poor South Africans who are willing to work for wages that are too low to actually live on. This is where the deeply vicious cycle of exploitation within a country with high levels of poverty, inequality, and unemployment sets in.

Far too many people are so desperately poor that they will take extremely low wages just so they can have something to live off of, and as long as there are people desperate enough to take ridiculously low wages, there will be employers out there who will pay them. After all, why would you pay a living wage or the proposed minimum wage to a worker when you can simply find another worker who will take your low wage of R1500 p/m without complaint because they would rather have R1500 than nothing at all? And so the cycle continues.

There are those who even argue that there are employers who employ undocumented migrants precisely because they do not legally have to pay them minimum wage. Undocumented migrants are far less likely to report labour law abuses, which include low wages and terrible working conditions, because they are too scared of being deported and  because they are unlikely to belong to trade unions. This exploitative practice then arguably feeds into the already existing xenophobic sentiments towards migrants, particularly undocumented migrants from other African countries. The refusal to hire South Africans is justified using generalised excuses such as “South Africans are lazy/bad workers” when the real reason is far more insidious.

This leads to us being stuck between a rock and a hard place. I personally believe that every person should be able to work a full time job, regardless of what that job is, and be able to earn a livable wage from it. On those grounds, of course I believe a minimum wage of R3500 p/m is simply too low. Attaining a job should allow oneself to take the first steps to being lifted out of poverty and a low wage does the exact opposite by keeping one in poverty.

At the same time, a minimum wage of R3500 may still be unattainable for thousands of South Africans. The reality is that those most affected by the desperation + exploitation cycle will be the first ones to lose their jobs and find themselves out in the cold with no job at all and no prospects.

While I do disagree with those who use this reasoning to justify not raising the minimum wage, I do think that this cycle is one that cannot be readily dismissed. The low minimum wage, and the fact that so many still make less than that, is an indication that alleviating the high levels of poverty in South Africa will take more than simply raising wages.

Don’t get me wrong, we must aim for a South Africa in which all people earn a livable wage, and paying your employees wages that are unacceptably low must stop being normalized and must come with serious consequences. At the same time, if we are to be serious about alleviating poverty, while the minimum wage is a good start, we must be looking at more radical ways to shrink the gap between the rich and the poor and to create more job opportunities so that people aren’t forced to put up with exploitative practices in order to put food on their families tables.

For example, there’s been a proposal to have a maximum wage to better equalize the salaries paid throughout the country. Any seconders?