PERCEPTIONS OF LOCAL BUSINESSES ON THE NEWLY PROPOSED NATIONAL MINIMUM WAGE IN SOUTH AFRICA

Year 2017, Volume: 9 Issue: 2, 120 - 136, 01.06.2017

N.P Mncayi J.J De Jongh

Abstract

As a country faced with many socio-economic challenges government
intervention prompting protests are not unique to South Africa. In light of these
confining circumstances, requests from various economic agents, especially
labour unions have been directed towards the implementation of a national
minimum wage (NMW). Although theory advocates negative effects from
minimum wages, international evidence regarding these labour market
interventions shows conflicting outcomes. The main aim of the study was to
analyse business owners’ perceptions regarding the impact of the implementation
of a NMW. A qualitative research approach was adopted to collect data with a
total of 10 in-depth interviews conducted with business owners in the Vaal
Triangle region, Gauteng. The results of the study showed that participants
acknowledged the advantage of implementing a NMW, perceiving the
intervention as a much needed step towards greater equality. Other perceived
advantages involved the security a NMW provides job-seekers and the possible
impact on improved demand for goods and services as higher wages stimulate the
economy. Concerns however were raised regarding small firms’ ability to cover
these wages and the capability of the legislation to account for inherent skill
differences in various sectors. The findings of the study provide valuable insights
especially in the South African context and even more so from a demand side
perspective regarding the possible impact of these labour market interventions.

Keywords

Minimum wage, Perception, Employers, Vaal Triangle, South Africa