New farmworker minimum wage: R105ph. And no-one is happy happy.
The new minimum wage has been set at R105 per hour, up from R69 per hour. This is an over 50% wage increase. As expected no-one seems to be fully satisfied with the outcome.
““We are happy, farmers are happy, unions are happy!” announced De Doorns farmworker Jurie Scheepers, when contacted by the Daily Maverick on Monday evening….“Well, not happy as in happy,” Scheepers qualified. “We hoped for R120 a day. But it’s more than R100.” ” (link)
The agricultural unions and Freedom Front have issued a series of statements raising concerns that this level of increase is unaffordable for farmers and will ultimately lead to job losses in the sector.
Pieter Mulder from the Freedom Front said this: “Due to the manner in way agriculture is structured in South Africa, the R105 minimum wage will lead to large scale job losses and an inevitable reconstruction of agriculture.
Everybody is welcome to a minimum wage. Unfortunately the choice in South Africa is often between minimum wages or no work at all. It should be expected that South Africa’s agriculture will in the next couple of years undergo a total restructuring where farmers will be changing to less labour-intensive products or will mechanise in an effort to balance their books.
Due to South Africa’s high unemployment figure, we are forced to emphasise labour-intensive labour practices in agriculture. South Africa, with this minimum wage determination, is inevitably starting to move away from this with urbanisation as the logical result. Where permanent workers will not be affected so much by the new wage determination, it will lead to the dismissal of tens of thousands of seasonal and temporary workers. The decision will also directly work against the governments’ intention to create more jobs in rural areas. It will also very negatively affect emerging farmers.” (link)
Agri-SA released the following: “ ”The 52% increase in the minimum wage for farmworkers, as announced by the Minister Oliphant this afternoon, has not duly taken into account the implications for agriculture and employment which will have drastic implications for this sector and related industries. This is especially true for labour-intensive sub-sectors where individual farmers will now have to make tough decisions on adjustments to ensure their sustainability. Such adjustments are inevitable, taking into account recent hikes in fuel prices and water tariffs and a likely sharp escalation in electricity tariffs,” said Johannes Möller, president of Agri SA.
He said that Agri SA is frustrated about the fact that although research information indicated that a minimum wage of R104 per day is largely unaffordable, it was decided to raise the entry level wage to R105 per 9 hour workday. It is indicative that popular demands for higher wages carried more weight in the decision than its implications on the sustainability of the industry, including its ability to maintain jobs.
The implication of this wage adjustment in an industry where farmers are price takers and not price makers, especially in international context, is not conducive to confidence, investment and the maintenance of the industry’s contribution to food security. It should also be questioned against the background of the National Development Plan - as recently adopted by the ruling party as its guiding policy framework - which has the vision of agriculture creating an additional 1 million jobs by 2030.” (Link)
And TAU said: “The country was done no favour by the Minister of Labour by announcing the new minimum wages for farm workers.
Firstly, it is the result of undue pressure and intimidation by seasonal workers, and this creates a precedent for future actions in other sectors. Good labour relations will consequently be jeopardized by this.
Secondly, small and emerging farmers in particular certainly cannot afford these wages. Even concerns in certain industries will not be able to pay these wages (such as dairy farmers who constantly get less for their milk, or wine farmers who receive a mere 54 cents profit per bottle). They will have no other choice but to reduce their workforce for the sake of financial survival. This means that the government is frustrating its own goals of job creation.
Thirdly, government is aiding the creation of a climate for inflation, by approving several increases which will ultimately have a negative effect on consumers: higher minimum wages, higher electricity prices and higher fuel prices are just some examples.” (link)
On the other side of the argument, COSATU issued this statement: “While this significant increase, of around 50% does not meet the legitimate demand of farm workers for a minimum wage of R150 per day, it is a significant step forward in creating an improved minimum wage floor, above which unions and employers need to negotiate a more acceptable level. It is a ‘minimum’ and must not be seen by employers as a maximum.
We urge the workers now to join the trade union movement so that this improvement can be consolidated and the fight for further improvements taken forward with the employers by a united, well-organised workforce.
R105 is still not a living wage that can feed a family. It is a figure suggested by researchers, jointly commissioned by the Department of Labour (DOL) and AgriSA in the Western Cape, who considered that R105 could be accommodated by the sector without substantial job losses, whereas if the wage went above R105 at this point, without other significant changes in the sector, there would be significant job losses.
We do not necessarily agree that the threat of job loss can be simplistically attached to a particular minimum wage level. The question of levels of employment (and employment growth) needs to be understood in the context of a range of factors affecting the agricultural sector, which has bled many thousands of jobs despite ultra-low wages.” (Link)
Bawusa have also stated that the wage is still too low.
It is worth reading Mildred Olifant’s full press release (Here).
I leave the last words to Rebecca Davies of the Daily Maverick: “On paper, a wage jump of 52% rings out like a stunning victory for farmworkers. But as usual in a South African context, there is more to consider here. The first is the pitiful base from which the wage is rising. The second is the long-term effects of the raise. If, as farmers claim, it will lead to a much smaller pool of more highly paid workers – that sounds like it might be a recipe for a long term disaster in the already wildly unequal society.” (Link to full article)
University of Cape Town