The effect of a minimum wage on the demand for labour in the domestic service sector : preliminary findings from the Phillip Nel park area

Abstract

New labour laws that include domestic workers have been introduced. A preliminary study attempted to determine how effective the implementation of the new labour legislation was in altering conditions of employment in this sector, in Phillip Nel Park. After the preliminary investigations had revealed a lack of commitment on the part of employers to the improvement of conditions of service, it was decided to investigate, as the main objective, how these employers would react to the introduction of a minimum wage. Employers in all income categories have indicated that they are prepared to spend more to maintain domestic service, pointing to an inelastic demand for domestic service across all income groups. A certain portion of the population is, however, only able to maintain this service at a reduced rate of service (fewer days of service). The study provides a clear indication that there is some merit in further investigating the issue of a minimum wage in the domestic sector.