Adjustment of National Minimum Wage: Out of touch with realities

Free State Agriculture (FSA) notes with shock and disappointment the increase in the National Minimum Wage, as published in the Government Gazette on 8 February 2021.

“The government’s decision to adjust the National Minimum Wage by 16% comes at a time when it is economically extremely challenging to produce food and it seems as if the government is out of touch with realities.” says Francois Wilken, president of FSA.

The National Minimum Wage has been adjusted from R18.68 to R21.69 per hour.

“Despite Free State Agriculture’s and other institutions’ objections to the proposed increase, substantial adjustments continued, regardless of the economic challenges the country is currently experiencing.” says Wilken.

In addition to joint comments, Free State Agriculture also individually objected to the proposed adjustments and warned that the adjustments could lead to job losses. The proposed adjustments were in some respects based on assumptions, as information relevant to the recommendations was not available to the National Minimum Wage Commission. It seems that the organisation’s warning has fallen on deaf ears and the seriousness of the current unemployment rate will in all probability show further significant upward trends and consequently have a negative impact.

“Time will tell, but this ill-considered decision will force farmers to put alternatives in place to survive economically.”