While acknowledging that many South Africans lived in dire poverty, Möller said in an Agri SA statement that a new, and possibly exceedingly high, national minimum wage would not be able to “cure all the [socio-economic] ills” the country was experiencing.
“The significant increase of 52% in the minimum wage in 2013 applicable to the agriculture sector reinforced the already observable downward trend of employment in the sector,” said Möller.
“Apart from other unintended consequences, a national minimum wage that is set higher than the current minimum wage in the agriculture sector will further decrease the labour absorption capacity of the sector for especially unskilled labour, violating the noble aims of the National Development Plan for the sector to create one million jobs by 2030.”
Proponents of a national minimum wage did not seem to recognise that “productivity sets the level of prosperity and not demand stimulation through merely setting wages at higher levels which boils down to just printing money”, said Möller.
What was needed was, among others, a better skilled labour force, less rigid labour markets and a supply side approach towards enhancing SA’s economic competitiveness, he said in the statement.