South African wages now 60% higher than SADC’s

With only months to go before the national elections, the ANC government has announced a 13% wage increase for farmworkers effective from 1 March 2009. Both TAU SA and Agri SA now fear labour minister, Membathisi Mdladlana’s apparently politically driven decision could have severe consequences for farmers, workers and national food security.
Agri SA chairperson for labour and the social policy committee Anton Rabe said during the consultation process prior to the latest sectoral determination for agriculture, his union recommended to the Employment Conditions Commission that the average CPIX for last year, plus a further adjustment for food price inflation, should be the basis for calculating minimum wages.
It was further recommended this should be subject to a ceiling of 10% a year which, given the Reserve Bank’s inflation targets of 3% to 6%, would leave room for an extra increase aimed at absorbing food price increases.
”This would also leave room for more gradual adjustments during the three-year period according to which minimum wages are normally determined,” said Rabe.
Government argues the wage increase as announced by Mdladlana is in line with minimum wages set out in its sectoral determination. The minimum wage farmworkers will now be entitled to is R6,31/hour, translating to R284/week and R1 231 a month.
“The wage increase seeks to balance demands both from employers and employees in the sector, but also takes into consideration issues such as affordability and cost of living increases amongst others,” said Department of Labour spokesperson Page Boikanyo.
According to Rabe, the recommendatios the labour minister received from his advisers clearly deviated from this in that an inflation rate for November 2008, which was the highest for the relevant year, had apparently been used to increase the minimum wage for 2009/2010 from R1 090 to R1231 per month, an increase of 13%.
“While Agri SA and farmers at grassroots level believe it’s important farmworkers’ income and living conditions should continually improve, the increase must be seen against the background of the global economic crisis, which South Africa and the local agricultural industry can’t escape,” said Rabe
TAU SA assistant general manager Chris van Zyl said they are concerned about the preliminary indication that government expects employers in the private sector to foot a higher wage increase than what government is prepared to authorise for state employees.
He said South Africa’s position as part of the Southern African Development Community (SADC) should be carefully considered, as free trade agreements are hardly fair if one member of the community forces farmers to pay higher wages than the rest.
“Available statistics indicate in comparison to other countries in the region, the minimum wage in the South African agricultural sector is approximately 60% more than similar wages paid in other member countries,” said Van Zyl.
“Now the possibility exists more farmers may leave the country to farm in other countries in the SADC region to remain competitive. This will no doubt contribute to unemployment figures and national poverty would be a direct result of political decision-making,” he warned. – Peter Mashala