BASIC MINIMUM WAGE SOUTH AFRICAN CHAMBER OF COMMERCE AND INDUSTRY Andrew Layman

RESEARCH FINDINGS 16 examples of mandatory minimum wage 6 had positive impact (on economy and employment) 6 had negative impact 4 neutral Must consider BMW in the context of socio-economic conditions

BRAZILIAN EXAMPLE (2002 – 10) 17 million new jobs Unemployment from 11,5% → 6,1% Formal: Informal sector 3:1 20 million relieved of poverty National minimum wage increased by 81%

Cause or effect? Consider distribution of prosperity Are we prosperous despite some individuals’ wealth?

THAI EXAMPLE (2012) 8% more productivity to mitigate extra employment costs Increase in inflation (1%) 1,7% decline in GDP 5,5% less employment

CONSUMPTION VS PRODUCTION 62% of GDP in 2013 (excludes public sector consumption) ….. And growing Australia 55% China 34% France 55% Germany 56%

JOB CREATION/SMALL BUSINESS Target: 49 20% pa → 11 million jobs Too many impediments to employment Legislation Red tape Wage demands Adversarial employer/employee relations Strikes and demonstrations

CONCLUSION This is not a good time for a Basic Minimum Wage Achievement of accelerated economic growth requires focus and no distractions Existing mechanisms (determinations + legislation) are sufficient