The potential effect of the proposed National Minimum Wage on the South African vineyard industry

Abstract

South Africa is a country with low GDP growth, one of the highest unemployment rates in the world, coupled with the highest gini co-efficient in the world. A national minimum wage of R3500 has been tabled by government for 2018. The agricultural sector of South Africa employs a large portion of the countries labour force and currently pays a minimum wage of R3001.13. This research aimed to establish what the potential effects of a national minimum wage would be on a sector which has already experienced vast changes in its minimum wage policy with the implementation of a sectoral minimum wage increase in 2012. It must be noted that while this was an exploratory study and therefore not exhaustive of all details, the response from the farmers interviewed depicts that the national minimum wage will have far reaching negative impacts. Based on the experience of the 2012 uprising, farmers predict employment statistics of both permanent and seasonal workers, will decrease, as well as having an adverse effect on supporting industries and local community businesses, and lastly an increase in crime rates.