We note the extraordinarily above inflation increase in the National Minimum wage that the government has approved, without consulting the affected business sectors. Government prefers to only consult big business who may well afford those rates, but the majority of South African businesses are the small, medium family-owned businesses, that cannot afford this high minimum wage in an environment of low economic growth, high cost of energy that is also unreliable, and high interest rates. 

This decision will further exacerbate the already high unemployment situation in the country, and lead to future retrenchments as businesses try to survive. 

The government’s decision is unwelcome, negligent and reckless and will encourage business to rapidly explore and deploy an uptake of available and nascent technologies and Artificial Intelligence applications to reduce reliance on labour in an effort to survive.

Furthermore, adding domestic workers to this same National Minimum Wage category, further complicates the situation. Many households are straining under the pressure of high interest rates and paying out of their own income, for public goods such as transportation, quality education, security and health care, due to the government’s failure to provide these public goods at an acceptable cost, quality service, availability and reliability. 

There is no justification for households to be paying for private armed response subscriptions, private education for their children, and private health care when they are also carrying the burden for taxes. 

There are not too many households that can afford the domestic rates now imposed by the government when real household incomes have been shrinking. 

Furthermore, this will also lead to more businesses failing in the Agri sector and create more cheaper labour migration into SA, given our leaking borders. 

We urge the government to review its decisions in this regard as this is negative and counterproductive.

 

Issued by SACCI