Home South African Agriculture warns of “devastating” impact of minimum wage

Agriculture warns of “devastating” impact of minimum wage

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“There are many other ways to alleviate poverty than simply increasing the minimum wage. If a higher minimum wage leads to fewer available jobs, then it is counter-productive.”

File picture: Ayanda Ndamane/African News Agency (ANA)

THE AGRICULTURAL industry has warned that the changes in the national minimum wage would cripple the sector and impact any prospects of creating further jobs.

AgriSA has said this week that a survey it conducted showed that the earnings threshold of the new minimum wage gazetted by the Department of Labour and Employment earlier this month could be devastating.

AgriSA executive director Christo van der Rheede said the study found that the majority of farmers were opposed to the increase in the minimum wage.

Van der Rheede said 549 out of 577 participants said they would have to exceed their budget for wages this financial year due to the new minimum wage.

“They will also be halting any new job creation initiatives. Unemployment rates are already high and have increased even more due to the pandemic,” Van der Rheede said.

“There are many other ways to alleviate poverty than simply increasing the minimum wage. If a higher minimum wage leads to fewer available jobs, then it is counter-productive.”

AgriSA said the government needed to keep in mind that farmers had been negatively affected by droughts in some parts and worse economic conditions.

Earlier this month, Minister of Employment and Labour Thulas Nxesi increased the National Minimum Wage from R20.76 to R21.69 per hour for 2021 from March 1.

Following a transitional phase, the sector has been aligned with the national minimum wage rate of R21.69 an hour.

The agricultural sector first expressed shock when the national minimum wage for farmworkers was gazetted, saying its inputs were ignored.

Commercial farmers union TLU SA said the department had pushed through the increase of 16 percent despite inputs questioning the proposal’s sustainability and its implications.

TLU SA president Henry Geldenhuys said farmers agreed that the changes in the minimum wage would mostly affect unschooled workers and lead to them falling into unemployment.

“We received feedback from a wide range of farmers and other role-players in the value chain which indicates that they will be forced to make amendments to accommodate these changes,” Geldenhuys said.

“Most of them have decided to close all labour- intensive divisions like growing vegetables to switch to more mechanised food production.”

Geldenhuys said the industry would declare a dispute with Nxesi and ask him to put the minimum wage on ice pending negotiations.

Head of policy research at the Institute of Race Relations

Dr Anthea Jeffery said the mandatory and double-digit increases in the minimum wage were sure to worsen job losses.

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