Minimum wage policy in post-1994 South Africa has been pursued with the explicit aim of ensuring that workers in low-paid, vulnerable occupations are guaranteed a basic subsistence income. The added appeal of a wage ‘floor’ is that it helps to lift a portion of the working poor from extreme poverty and facilitates the redistribution of income in an extremely unequal society. South Africa’s history of legally-sanctioned economic exploitation, together with an influential trade union movement, add weight to arguments in support of minimum wage laws and make the introduction of such laws significant.

The recent protests over farm workers’ wages in the Western Cape highlight the urgency and complexity of generating sound minimum wage policy in a globalised sector that is struggling to square equity concerns with the demands of efficiency. A clear understanding of minimum wages and their impact is a crucial part of the debate going forward.

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Written by Ben Stanwix, Researcher, Development Policy Research Unit, University of Cape Town

This article was first published on the Econ3x3 website – Accessible policy-relevant research and expert commentaries on unemployment and employment, income distribution and inclusive growth in South Africa.