Speaking on CapeTalk, UCT social science academic, Prof. Jeremy Seekings, cautions that South Africa's minimum wage could result in not being able to take advantage of a gap in the low-skill manufacturing job market.
Millions of low-skill manufacturing jobs are going to be leaving China in the next few years - opening up the question as to where these jobs will go to. With a 27% unemployment rate in South Africa, it would be a shame to miss out on this opportunity, explains Seekings.
The risk of pushing the minimum wage in SA up means unemployed South Africans will not get a significant share of the jobs that are available on the global markets.
UCT academics have argued that government should be thinking about export processing zones in the Eastern Cape where they could attract large-scale low-wage jobs, with the potential of creating hundreds of thousands of jobs.
That possibility is going out of the window with minimum wage.— Professor Jeremy Seekings, UCT Director Centre for Social Science Research
Seekings explained that the set minimum wage of R3500 a month or R20 per hour is "not exactly right" because it won't apply in some areas of the economy. A very large number of workers, such as agricultural, domestic and care workers, will be exempted.
Employers will be able to apply for exemptions on an individual basis, so it is a norm, which will be applied to most of the economy, but not the entire economy.— Professor Jeremy Seekings, UCT Director Centre for Social Science Research
Here's the interview with UCT's Prof. Jeremy Seekings:
This article first appeared on 702 : Minimum wage to cause job opportunity loss - UCT Social Science Research Centre