Minimum wage widely ignored

2010-11-01 07:00

Johannesburg - South Africa’s numerous prescribed minimum wages are ignored 45% of the time, an investigation has found.

Workers in unorganised sectors in which prescribed wages apply are also paid 36% less than the prescribed wages for those sectors.

Minimum wages are especially disregarded in regions with higher unemployment rates than the country’s average.

These were the principal findings in research commissioned by the department of labour and presented at a conference held by the University of Cape Town’s development policy research division on Friday.

The researchers, Professor Haroon Bhorat, Professor Ravi Kanbur en Natasha Mayet, analysed the September 2009 labour-force survey and compared it with nine of South Africa’s 11 sectoral determinations. Because of differences within sectors, the application of a total 36 different minimum wages was tested.

These minimum wages are all largely disregarded, but security guards, farm workers, domestic helpers and certain retail workers, in particular, lose out because the regulations are not enforced.

In the case of private security guards, especially, employers do not apply the government’s minimum wage policy, the investigation shows. A total of 67% of the country’s security guards are paid less than the minimum. In 2007 they were paid 42% less than the minimum. At that stage the minimum was under R3 000 a month.

In 55% of cases farm workers are underpaid and these workers receive on average 31% less than they are entitled to according to law.

About 47% of the workers in the taxi industry are also underpaid. They receive on average 38% less. In contrast, minimum wages in civil engineering and in the sector for retail managers are generally complied with.

The efficacy of prescribed minimum wages is influenced by a multiplicity of factors, the research reports.

Application of the regulations on minimum wages is particularly strongly related to the presence of large-scale unemployment in an area.

Competition for scare jobs appears to be the overriding factor. In these areas, especially, labour inspectors have had an influence on payment of the prescribed wage.

There’s a clear dynamic related to local surplus labour markets, said Bhorat on Friday.

The presence of the 800 or so inspectors in various areas has a measurably positive effect – but the effect is slight.

It’s possible that more inspectors would force employers to stick to the regulations.

Workers belonging to unions or those working for government institutions or larger companies more often receive the prescribed wage.

An interesting finding is that workers’ chances of receiving the prescribed wage is much the same whether they work for a formal or an informal enterprise.

The absence of written contracts and illiteracy in English contributes to far fewer workers receiving the minimum wage.

- Sake24

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  • JFS - 2010-11-01 08:06

    That's right, unemployment are at it's highest point in years, lets come down on the employer and enforce minimum wage so that he can retrence more wokers which will relate to even higher unemplyment. Yes, I know there will be people crusifying me for saying this, but don't you think a small income is better than none at all. At the end of day the extra exspenses just gets added onto the price and who's the people paying for it, us, the consumer and we are already under big financial constraint as it is.

  • Andrew - 2010-11-01 08:21

    Well this is supposed to be a free market supply and demand. Why pay some one the minimum wage when there is someone else willing to do it for cheaper. Minimum wage will criple his country and make us uncompetitive compared to countrys like China, India, Brazil and Mexico

  • Rick Cooper - 2010-11-01 08:23

    The labour laws, including the minimum wage stipulation, are idiotic in a country with a surplus of Malema standard labour. The real problems that SA faces is corruption - this government appears to be ignoring the anti-graft laws.

  • Clueless - 2010-11-01 08:28

    What is the minimum wage?

  • pap & wors - 2010-11-01 08:36

    Even the minimum wage is too much when there is extremely low productivity to go with it.

  • GP - 2010-11-01 08:36

    If small business are forced to pay a prescribed minimum wage there is going to be more unemployment in this country.SARS has no mercy on small business.

  • josy - 2010-11-01 08:49

    i call this laws situational laws, they are made becouse one has to settle imbalances not fairness or intergrity or equality and such imbalances are targeting a certain group yet pepetrated by development ,wealth,civilisation and education other than that group.-that is why even law enforcer are reluctant to arrest on such laws administrators of such laws are mostly puzzled when handling such law: o boletse menzi a re"we change the law"

  • Bertus - 2010-11-01 08:51

    I have work for a domestic worker for about 4-5 hours a week, but I make use of a cleaning service. I pay more and get less. The issue was not minimum wage but finding someone I can trust my house-keys with when I am not at home that is also willing to work for me for only half-day a week.

  • Vico - 2010-11-01 08:51

    The minimum wage and related labour laws have allowed me to do my own work in the garden and household, thereby saving me a lot of money and trouble -- and it's also taxfree!

  • Janaman - 2010-11-01 09:01

    JFS said exactly what i want to say!!! but try explaining this (or anything of logic) to Zuma

  • Voltage - 2010-11-01 09:14

    When a tender process is being decided upon, one of the main factors in the determination is cheapest price, yes, even with government tenders. When it come to employing a person to do a job, this process of "the cheapest price" is not allowed to be followed if that price is below the minimum wage. Why do we find this so surprising when we also have to take into account skin colour? Short term foresight for a problem that needs a much longer term vision.

  • eric - 2010-11-01 09:21

    I agree that a small income is better than nothing but one of the major challeges we are faced with in SA is unequal distribution of wealth/income. I know very well we cannot all earn the same/equal salary cause of the variety of skill, speed & experience in executing the same assighnment , but the point here is to agree on a minimum wage that one should/must earn.

  • AJ - 2010-11-01 09:28

    I retrenched the Domestic Worker that worked for me. I was paying way above the minimium wage but after a vist from the "Union Rep" and another increase demand (recommended by the Union) I was forced to retrench her. My wife and myself have not had an increase in 3 years and could not afford the luxury of a maid anymore. Another productive person put out of a job by the Unions and crazy laws.

  • TT - 2010-11-01 09:31

    How do I pay reeuired minimum wage if domestic worker stays with me? No rent, no Grocery etc...

  • RCB - 2010-11-01 09:37

    Every company is supposed to be registered with the a bargaining council and they detemine the minimum wage for each industry. The laugh is it is only big business that sit and discuss the wage increases and small to medium company is not consulted. The question will always be, pay someone the minimum wage dictated to us or feed someone who will work for less and will probably work harder because there are no guarantees? We need 2 tiers ofemployment. 1 is for someone who will only work under a union law and cant negotiate his wage with the company. 2 someone who will happily negotiate and rather have a job than be retrenched. Look at Europe and companies sat with staff and asked should we all earn less or retrenth. They supported the latter. In SA it's cut them or keep paying even if you cant afford them and the whole company goes out of business.

  • Realist - 2010-11-01 09:39

    Minimum wage, AA, BEE policies are all detrimental to employment yet the ANC still hangs onto this foolishness. Better some wage than no wage! Better a job than no job! Better some pride in being employed than no pride by being unemployed! It is not the ANC's job to create jobs but it has to create the environment where business can create the jobs.

  • John - 2010-11-01 09:43

    Ag South Africans..... complaining about minimum wages for domestic workers, while they dive in their pools and drive off in their mercedeses.... Try living in Europe and experience first hand that what you view complain about is pure luxury.

  • Vickerman - 2010-11-01 10:04

    Minimum wage makes sense when the employer gets equal return on cost - BUT in RSA most employees believe that by simply being at work earns them the right to be paid, and if they actually (heaven forbid) have to do some actual work, they should get a bonus on top of their minimum wage. Do away with minimum wage, do away with labour-protecting laws, and SMME's will start to show growth again, and be able to employ more people, thus benefitting a larger amount of people. What is better: 10 people earning R3000/month each, or 30 people earning R1000/month each? Once again a law that was written by Gumment officials with absolutely no experience or knowledge on how to run a business profitably. I recall when the minimum wage statutes were introduced, how many domestic servants were retrenched. Ask those same domestics if they would work for 1/2 the minimum wage, and I guarantee that all of them will be very happy to do so. But alas they are all unemployed now.

  • K1 - 2010-11-01 10:16

    So what? The Laws against Rape & Murder are also ignored 75% of the time. Fix that first.

  • Mhluzi Bhaka - 2010-11-01 10:19

    All this talk about minimum wage yet there is never any discussion regarding minimum productivity. Too often people are hired and once they are on the books they just slack around. Be more productive and get paid what you are worth.

  • Clive - 2010-11-01 10:26

    For those that complain about minimum wage & state that the only way to win business is by not paying the minimum. Remember you are enjoying a competitive advantage vs companies that comply with the law. This is also a corrupt behaviour

  • Maureen B - 2010-11-01 10:40

    I cannot afford as a pensioner to increase my domestics wage(paid in salary and food plus a yearly bonus) so have decreased her working days (she works 4 hours a day with meals)so she can find work elsewhere to suppliment her income. The problem is that I have offered her another day off to do the same but she is'nt keen saying there is no work available. I believe attitude is linked to income!

  • GinaS - 2010-11-01 10:42

    As a part employer I think that minimum wage to anyone entering the job market should be the amount per month no tax required.Minimum of +/- R1200.00 per week. Employees should be told by their unions what wages to expect for jobs with experience and those with out experience.Do not leave it up to the employer. If an employer can only pay a certain amount and the worker accepts the job then this must be written into his contract. But please employers do not abuse the workers if you can pay a living wage please do so.I also think that people nncoming into this country from the north are spoiling it for the local workers, as they the aliens are accepting cheap jobs and then later they complain. Their should be a law South Africans first with a legal ID., exactly what overseas countries do.

  • Christopher Brunsdon - 2010-11-01 10:52

    You get what you pay for: We pay way above minimum wage for our staff as I know what its like earning below that for many years. Our staff are important to us and their posetive attitudes in the work plave have ensured that our business is very successful but more important, very profitable.

  • @ Vico - 2010-11-01 11:07

    I have done exactly the same - got rid of my domestic worker and gardener. I also wash my own cars, do my own DIY, etc. Imagine how many others have followed this same route and the impact of this on unemployment. But hey the Gov created this so its their little problem to solve.

  • motswanagape - 2010-11-01 11:15


  • Margaret @ GinaS - 2010-11-01 11:27

    And what is the point of linking the minimum wage to tax exempt levels? Some "skills" are worth a whole lot less. There is also a glut of such lowly skilled workers. If they want to be in a position to earn a higher salary/wage, then they need to be able to improve their own value in the job market, eg improving their education after hours - many employers sponsor this, acquiring new skills voluntarily, etc

  • john - 2010-11-01 11:58

    Strange thing is that the government departments will continue to award tenders for security work to companies tendering prices where the price is lower than the prescribed minimum wage.They have no excuse whatsoever, by doing what they are doing just makes the whole thing a joke.

  • doped - 2010-11-01 14:50

    Why do you think we employ the "uitlanders" They will work for a reasonable wage not the unions/Govt over priced market.Vavi will never realise what he has done to the labour market. PnP should retrench 30% of staff if the union insists on an inrease above inflation. Business soon will not survive as costs skyrocket.

  • Decent guy - 2010-11-02 13:31

    Oh come on people, be serious. The minimum wage in the clothing industry is R324 per week - that is only R 1 296 per month. Even in this article where they mention the R 3000 minimum wage for security - that is still peanuts. Stop being such a selfish bastard and pay your workers properly please. I would like to see any of the cheapskates on this site survive on R 2 000 or R 3 000 per month! If you think it is such a lot of money, put your money where your mouth is and go work in a minimum wage job - we'll see how much you like it.

  • Alex - 2010-12-18 13:23

    We must all be aware that`we are equal in the eyes of god.I believe that it is pleasing to god when people willingly make personal sacrifices so as to provide comfort to the less fortunate regardless of race.

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