May 29, 2018 / 4:04 PM / a year ago

South African parliament approves national minimum wage bill

CAPE TOWN (Reuters) - South Africa’s parliament passed a national minimum wage bill on Tuesday by an overwhelming majority, part of an effort by President Cyril Ramaphosa to tackle strikes and wage inequality.

The measure, opposed by the official Democratic Alliance (DA) opposition party, will see millions of workers earn 3,500 rand ($277) a month. It was initially meant to be introduced earlier in May in a bid to boost the economy.

The bill will be sent to parliament’s upper house for ratification and becomes law once it is signed by Ramaphosa.

Supporters of the minimum wage say it will reduce inequality and stimulate economic growth as workers spend more.

Critics say it could lead to increased unemployment, already at record highs, because some employers won’t be able to afford higher wage bills.

Labour Minister Mildred Oliphant said the bill could address the perennial wage inequality and poverty in South Africa.

“I am very pleased that the journey towards addressing the plight of the lowest paid workers in the labor market has reached this milestone,” Oliphant told parliament.

The minimum wage bill was one of a raft of labor-related bills passed by parliament and which has drawn criticism from some trade unions worried that policies aimed at preventing prolonged and violent strikes contained in the bills would dilute worker rights.

Thousands of union members protested against the proposed minimum wage in April, saying it was inadequate.

However, labor federation Cosatu, the country’s biggest union which is also part of the ruling alliance with the African National Congress, welcomed parliament’s decision.

“The minimum wage of 20 rand per hour will see the wages of 6.4 million South Africans rise. This is equal to 47 percent of workers and will directly benefit half the nation,” Matthew Parks, Cosatu’s parliamentary coordinator, said in a statement.

Others disagreed.

“Clearly this proposed wage will destroy jobs for the marginal workers and most certainly prevent their entrance into the economy,” said Michael Bagraim, the DA’s shadow labor minister during the debate.

More than two decades after the end of apartheid in 1994, South Africa’s economy is still characterised by deep wealth inequality between whites and blacks and high levels of unemployment.

Reporting by Wendell Roelf; Editing by James Macharia and Edmund Blair

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