Divided views on impact of minimum wage on economy, unemployment

Chief economist of Efficient Group, Dawie Roodt, says there is an employment problem because it's expensive to employ people and there are not enough people with the required education and skills.

Rood says the minimum wage of R20 per hour expected to be implemented by May 2018 is not good.

He says growing the economy is the only solution to reducing unemployment.

We have about between 7 and 9 million people without jobs in South Africa. If you want to reduce that by half a million, you need to grow the economy with an additional 2% at least. We need to grow the economy between 4% and 5%.

Dawie Roodt, chief economist of Efficient Group

Currently the economy is not even going to grow even 1% this year.

Dawie Roodt, chief economist of Efficient Group

Roodt questions setting up a minimum wage saying government should not intervene.

We should be in a position where business people are allowed to pay people money in order to grow their businesses, and we should allow labour to have a right to set their own wages.

Dawie Roodt, chief economist of Efficient Group

Who are politicians to tell me how much am I allowed to work for.

Dawie Roodt, chief economist of Efficient Group

There are many people even with PhDs telling me that they are prepared to work for nothing because they want experience, and that's going to be illegal from now on.

Dawie Roodt, chief economist of Efficient Group

Chairman of the advisory panel on the national minimum wage, Prof Imraan Valodia, says it is not true that the national minimum wage has a negative employment impact.

Valodia says the minimum should not be seen as a trade-off.

We have got to think about shaping the economy and how we get get economic growth and increase productivity in the workplace.

Prof Imraan Valodia, chairman of advisory panel on the national minimum wage

Evidence is clear that countries that grow are countries with caring economies.

Prof Imraan Valodia, chairman of advisory panel on the national minimum wage

Cosatu's Neil Coleman says up to six million workers work full time but are below minimum wage.

Coleman explains that companies can make shifts in salaries to address salary differences in the company without reducing the number of employed people.

The question of the distribution of surplus is the issue of power. It's about that employers - highly skilled, and managers - have had a lack of power that ordinary workers, particularly black workers have.

Neil Coleman, Cosatu

And that's not as a result of a market. It's a result of a history of colonial disposition, politics, poverty, dumping people far away areas, lack of skilling and Bantu education.

Neil Coleman, Cosatu

Just when you have to intervene in situations where there are extremely low conditions, you have to intervene in conditions where people are paid so little that their children are not nourished, and they can't educate and clothe their families.

Neil Coleman, Cosatu

Listen to the audio below for more analysis...


This article first appeared on 702 : Divided views on impact of minimum wage on economy, unemployment


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