Report: Investigating the Feasibility of a National Minimum Wage for South Africa

The DPRU is pleased to announce that a report commissioned by the Department of Labour, Investigating The Feasibility Of A National Minimum Wage For South Africa​, has just been launched.​

Part I, Quantiative Analysis Investigating The Feasibility Of A National Minimum Wage For South Africa, was prepared by the DPRU. Part II, Qualitative Analysis Of How A National Minimum Wage Might Affect Young People’s Labour Market Outcomes, was prepared by a team at the Centre for Social Development in Africa (CSDA), at the University of Johannesburg.

Minimum wages in South Africa are currently organised through two main structures, Bargaining Councils and Sectoral Determinations, which cover the majority of low-wage workers in the country – close to 70%. More recently, however, the introduction of a National Minimum Wage (NMW) has been the subject of deliberation and discussion.

This report attempts to provide an extensive review of the domestic and international literature, together with a highly set of empirical estimates and simulations around a NMW. This serves as background information to the decision which will ultimately be taken around the level at which to set the NMW in South Africa. 

In summary, this report recommends that the South African Government consider introducing a NMW to address low wages, however, critical attention must be given to the design and implementation of the policy so that it achieves the goal of protecting workers, minimizes the potential negative consequences, and succeeds in improving levels of compliance with legislated wages.

To read the Literature Summary for the report, click here.