Is South Africa’s National Minimum Wage (NMW) the most harmful prohibition against unemployed work-seekers getting jobs in the world?
This is the question at the heart of an ongoing debate in South Africa – and of a webinar discussion tomorrow IRR Fellow Gabriel Crouse, and Senior Lecturer in the Department of Economic and Finance at the University of the Free State (UFS), Dr Celeste Campher.
Titled “Is Suspending the National Minimum Wage a GNU Route to Jobs Growth?”, the webinar, starting at noon, forms part of the Africa Dialogue Series hosted by UFS. (See link below).
In a statement, the IRR points out that, “(while) ideologues on both sides have passionate answers” to the question of whether NMW is a help or a hindrance, “leading-edge economic research debunks both the right-wing ideological myth that every NMW in the world should be cut as well asthe left-wing ideological myth that every NMW should be raised”.
“Instead, evidence demonstrates that the NMW is a policy tool that trades off winners against losers in different ways depending on the specific rate of the NMW, the concentration of the labour market, enforcement effectiveness, and broader market conditions, which can combine to deliver a net benefit or a net loss.
In tomorrow’s webinar, Crouse and labour economist Dr Campher will evaluate the merits of the NMW against domestic and international labour economic research.
“Dr Campher advocates increasing the NMW at the inflation rate or more, though not necessarily ceding to union demands for an NMW increase at inflation plus 3%. By contrast, Crouse finds that the NMW Commission has acted irrationally, against its mandate, ignoring evidence in its own reports by setting the NMW at the existing high rate, which does far more harm than good, particularly to poor, work seekers.
“Crouse recommends that the government of national unity should stimulate economic growth, jobs growth, and skills development by liberalising the labour market, i.e. reduce the NMW, to stimulate economic growth, jobs growth, and skills development.”
To join tomorrow’s webinar, go to: https://bit.ly/ADSminwage
Time will be set aside for questions to be put to the speakers.
[Image: Gerd Altmann from Pixabay]