Essay On Minimum Wage In South Africa

Minimum wage regulation

In south Africa there is a minimum wage regulation based of the legislation and the labour relations act LRA of 1995 and the basic conditions of employment act BCEA of 1997. These two acts together are the outline for the wage bracket criteria for south Africa. This explains how the hourly, weekly and monthly rate was made up. The goal of the minimum wage legislation is to redistribute the wages of low paid workers and to lift these poor workers out of poverty (Freeman, 1996). South Africa’s large numbers of working population is the poor and the elements of labour market discrimination was inherited from the past which are strong arguments in support of minimum wages in this country. As with most economic shocks, however, minimum wage policies may create winners and losers, the latter being those that potentially lose their jobs.

The minimum wages under a variety of assumptions about how the economy functions. Some of the examples are covering retail and wholesale trade workers, domestic workers, farm and forestry workers, taxi operators,

Root 1985) inflation causes great damage to the living standards of the poor people’s households as incomes are already reduced. The South Africa’s labour-market absorption and participation rates are extremely low especially for less skilled people. This causes low levels of economic growth and investment. cutting workers’ hours, and reducing seasonal work. When the economy becomes unstable then jobs become unstable for minimum wage workers as the company would prefer to keep the skilled workers with years of experience and let them go.

Positive consequences of minimum wage

Minimum wage increases may have a positive effect in saturated labour markets where demand for new workers is likely to match or exceed supply. Low income people would have more money in their pockets, which would help boost the