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South Africa’s presidential frontrunner announces country’s first minimum wage

By Crystal Orderson and Patrick Smith in Cape Town
Posted on Wednesday, 8 February 2017 17:15

On the eve of President Jacob Zuma’s State of the Nation address to parliament on 9 February, his deputy, Cyril Ramaphosa, announced the government is to bring in a minimum wage of R20 ($1.5) an hour in a renewed attack on the country’s chronic inequality.

Briefing journalists at parliament in Cape Town, Ramaphosa said: “The minimum wage could be a gamble, but it’s very important to lift 6.6 million people out of poverty […] It’s a good bet to take.”

Before the minimum wage becomes law – probably next year – the government will set up a special panel to listen to concerns from both workers and employers.

Billed by Ramaphosa, who is a frontrunner to succeed President Zuma, as part of what the ruling African National Congress (ANC) calls its Radical Economic Transformation strategy, the minimum wage proposal prompted criticism from both company bosses and unions.

The political temperature has been rising in Cape Town this week ahead of Zuma’s speech. On 8 February, the Save South Africa campaign group called for Zuma’s immediate resignation at a rally at St George’s Cathedral and the opposition Democratic Alliance party launched its own state of the nation address.

South Africa is one of the few African economies to introduce a minimum wage. But many local companies complained that it would increase unemployment, already at 27% according to government figures – its worst level in 12 years. In local elections last August, tens of thousands of the country’s poorest workers switched their allegiance from the ANC to the more radical Economic Freedom Fighters.

On 6 February, Ramaphosa told the Progressive Professionals Forum in Cape Town that the government’s new policies would tackle the country’s inequalities. “It cannot be right that half of all South Africans are living on less than R4,000 a month.” The aims of the policies are to break up big monopolies, diversify company ownership and speed up the redistribution of land.

Ramaphosa conceded that there would be “some flexibility” for the wage levels of domestic and farm workers, and that small companies would have more time to comply than the big industrial and retail companies.

But the Congress of South African Trade Union (COSATU), the country’s biggest labour federation, pulled out of a planned signing ceremony with Ramaphosa and Zuma on the minimum wage because of the lack of guarantees in the proposed law. Instead of an hourly rate, COSATU wants a minimum monthly income of R4,500 for all workers. The more radical National Union of Metalworkers dismissed the measure as completely inadequate and called for industrial action against it.

The trade unions’ position points to growing polarisation. However, the ANC is installing giant TV screens on Cape Town’s Grand Parade to relay Zuma’s speech in the evening of 9 February and has called for a mass rally there. Zuma is expected to address the crowd at about 10.00pm.

But the government has come under growing criticism for what is being called “the militarisation of parliament” after it emerged it is deploying more than 400 soldiers and 4,000 police to guard the area as Zuma makes his speech.

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