A National Minimum Wage in the Context of the South African Labour Market

Abstract

Understanding the composition and wage structure of the South African labour market is crucial in the progressing national minimum wage debate in the country. This study highlights the centrality of wages in household income, and in determining inequality and poverty levels in the county. It then charts key trends in the labour market, before presenting a snapshot of the composition and earnings of the workforce in the current environment. A definition for a “working-poor” threshold is developed in the paper by linking individual earnings to household poverty. Finally, we consider the differential coverage that a national minimum wage would have on different sectors and demographic groups in the economy.This paper forms part of the National Minimum Wage Research Initiative (NMW-RI) undertaken by CSID in the School of Economics and Business Science at the University of the Witwatersrand. The NMW-RI presents theoretical and case-study evidence, statistical modeling and policy analysis relevant to the potential implementation of a national minimum wage in South Africa. For more information contact Gilad Isaacs, the project coordinator, at [email protected] or visit www.nationalminimumwage.co.za. SALDRU is grateful to the NMW-RI for making this paper available as a SALDRU Working Paper