7Oct, 2019

Minimum wage putting jobs at risk?

By: | Tags: | Comments: 0 | October 7th, 2019

With nearly 10 million adult South Africans sitting at home unemployed, the introduction of a National Minimum Wage bill at the beginning of the year seems ill timed to say the least!

No one can argue with the need for workers – especially domestic and farm workers – to be protected from exploitation. But the country can’t afford to shed more jobs. And with the number of business liquidations having increased by 53% between April 2018 and April 2019, shouldn’t small businesses and NPOs at least be exempt from the National Minimum Wage (NMW)?

Exemptions for Non Profits?

Like many other NPOs, Tafta operates with limited resources. Some of our services – for example care work – are subsidised by the Department of Social Development (DSD), with the organisation being expected to fund the balance through fundraising activities. But, with the South African economy having shrunk by more than 3% in the first quarter of 2019, raising funds from local businesses and individuals has become a major challenge!

This, together with the waning DSD subsidy, is placing severe pressure on our resources to meet ever growing needs in the elder care sector – and Tafta, along with other NPOs in the care sector, may not be in a position to pay care workers the prescribed minimum wage.

Stipend

In Wentworth, 12 marginalised women have been trained to provide home based care for elderly members of their community. The carers serve between 80-86 elders monthly, in return for a small stipend.

We know this payment is inadequate and we’d love to be in a position to pay our carers their real worth. But we can’t afford to. And at least these women – who previously had no income whatsoever – now have the opportunity to earn something. If we are forced to close this programme – which has been in operation for 20 years, the result will be more unemployed people and a lack of elder care in this underprivileged community.

Breadwinners

Arguments for the minimum wage include the fact that many unskilled and semi skilled workers are sole breadwinners. Their pay may need to support a family of five, seven or even more – including children and elderly parents. But is it fair to place the burden for that on the employer’s shoulders?

Employers also under pressure

Many small business owners and employers of domestic workers are struggling themselves. Affordability is the reason many are limiting their own families to one or two children. Even then, stay-at-home moms are a rarity. Whether or not they want to, most mothers are forced to leave their babies in child care and work full time to make ends meet.

It has also been suggested that, because transport can be a problem, working hours for domestics should be 9am – 3pm. But how does this sit with someone holding down a high powered, stressful job, who seldom leaves the office before 7pm? Is that OK because they have a company car and can drive home at any time?

Side Hustle

And what about the latest phenomenon – the side hustle?

People in full time employment are working a second job to supplement their income – selling items online, repairing computers, teaching yoga, music or English to foreigners, writing blogs, baking or cooking, or driving Ubers.

Entrepreneurial in nature, these activities offer no guarantees of minimum earnings. Yet, it’s often said that we need more entreprenuers in South Africa … creating a culture where people can turn their ideas, skills, passion and sheer hard work into an income stream. What are your views?