Employment stakeholders across the country are divided almost down the middle on whether to increase the national minimum wage.
The National Minimum Wage Commission on Thursday released its annual review of the national minimum wage (NMW).
More than 400 stakeholders were consulted, with the public having until 16 January to comment before the commission makes its final recommendation.
The NMW increased by 4.4% earlier this year and has increased by 43% from the hourly minimum rate in 2019.
Majority agree NMW is enough
The annual review process involves considerations from local stakeholders as well as comparisons with international standards.
The commission stated that an estimated 5.5 million South Africans were currently employed at the minimum legislated rate or lower, although enforcing compliance was a continued challenge.
Respondents came in the shape of 35 written submissions from the Department of Employment and Labour (DEL), three from trade unions and 399 from organisations and individuals representing civil society.
The report confirmed that opinions were divided on the matter, stating that 54% of those who provided inputs agreed with a NMW increase, while 46% disagreed.
“Data suggests that support for the national minimum wage tends to be strongest in formal, higher-revenue industries that can absorb wage increases, while it is weakest in labour-intensive, lower-revenue industries,” the report states.
“The majority — 66.4% — believed that the current national minimum wage is enough to meet basic needs, while 33.6% felt it is not sufficient,” it adds.
Businesses considered
The report cited the Kaitz index, which measures a country’s minimum wage relative to its national average.
As per the 2025 Kaitz index cited by the Development Policy Research Unit, South Africa ranks 12th in the world for the best minimum wage to national average ratio.
In determining the NMW recommendations, economic factors such as the commission considered inflation, the cost of living, national wage levels and union negotiation outcomes.
Additionally, the “ability of employers to carry on their businesses successfully”, levels of productivity, the impact on small businesses, employment prospects and poverty alleviation were all key considerations.
Employers argued that South Africa’s NMW was higher than that of countries with which it competed for international trade and the highest in Africa.
They highlighted that a weak economy left businesses already operating on narrow margins vulnerable to increased labour costs.
Farmers stated their margins were already negatively affected by rising electricity expenses, compliance costs and the need to spend increasingly more on security and fire protection.
The commission heard that minimum wage limits were barriers to growing employment, with the report mentioning how roughly 20% of domestic workers had lost their jobs, and 36% had their hours cut in recent years.
However, unions argued that the NMW was too low and that it should be increased by several percentage points above inflation.
Job seeker empowerment
The DEL allows for an exemption to the legislation, but this is subject a strict approval process.
After a successful motivation, the exemption is valid for a maximum of one year, and allows for a reduction to no less than 90% of the NMW.
The commission’s report stated that 103 requests for exemption had been received in 2025.
The Free Market Foundation (FMF) have previously advocated for another solution to the “state squeezing the flexibility and dynamism out of the economy through over-regulation”.
The FMF believe a Job Seekers Exemption Certificate (JSEC] that would allow the unemployed to waive NMW enforcement to allow themselves to be employed at a lower rate.
“This would make themselves available for employment on mutually agreed upon terms with employers without the state dictating terms like it does today,” FMF Head of Policy Martin van Staden told The Citizen.
“We need people en masse to work and be productive if we want to avoid catastrophe,” he concluded.
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