In 2014-15 the South African Government began to consider seriously proposals
from the trade union federation COSATU that a uniform, ‘national’ minimum
wage be set at a level several times higher than the lowest sectoral minimum
wages set hitherto. The suggestion that a national minimum be set is hardly
controversial, given that the state already regulates the wages of most low-paid
workers and has the statutory power to regulate any that fall outside of the
current sectoral mechanisms. What is controversial is the level at which a
national minimum should be set, and the procedures for setting it. COSATU
argues that a high national minimum is in line with international norms and
would not have negative effects on employment. We show that South Africa’s
existing sectoral minima are in fact broadly in line with international norms and
that COSATU’s proposal is far out of line with them. We show also that both
international and South African evidence suggests that COSATU’s proposed
high national minimum would cause job destruction directly without any
compensatory macro-economic boost to employment. We conclude that a high
national minimum wage would be likely to worsen poverty and inequality, and
suggest that expanded tax-financed social assistance and job creation
programmes combined with South Africa’s existing sectoral minimum wages
would be more effective ways of addressing poverty and inequality.