Employers warn minimum wage increase could deepen unemployment in South Africa

The Department of Employment and Labour has raised the National Minimum Wage amount to R30.23 per hour, increasing the amount by R1.44, and hitting the R30 mark for the first time in history. 

Minister of Employment and Labour, Nomakhosazana Meth, announced that the minimum wage would increase from R28.79 to R30.23 from 1 March 2026. 

“The R1.44 upward move will benefit all workers, including vulnerable farm workers and domestic workers,” said Department spokesperson Teboho Thejane. 

Workers employed under an expanded public works program are excluded from this increase, as these workers are employed under a special dispensation. Their adjustment will be an increase from R16.16 to R16.62. 

This has been met with mixed reviews.

While the Congress of South African Trade Unions (COSATU) has praised the measure as a victory for workers, the National Employers Association of South Africa has warned this could worsen already-high unemployment rates. 

“The national minimum wage is the floor which an employer is legally obligated to remunerate employees for work done. No employee shall be paid below the national minimum wage,” said Thejane. 

Employers would be charged with unfair labour practices for altering hours of work or other conditions of employment in implementing the increase. 

COSATU said that this increase amounts to inflation, plus 1.5%, and while the organisation has proposed a slightly higher figure, it is pleased that the department has granted its demand for an above-inflation raise. 

“This positive increase will help protect the value of the NMW and workers’ ability to take care of their families.  It will inject badly needed stimulus into the economy, spurring growth, sustaining and creating jobs,” COSATU said. 

“It will provide relief to nearly 6 million workers earning within the NMW range, particularly farm, domestic, construction, retail, transport, hospitality, security, and cleaning workers.”

The organisation highlighted the progress that has been made, saying that the minimum wage has increased significantly from R20 in 2019, with domestic workers and farmworkers paid less: R15 and R18, respectively. 

Government employees paid half the minimum wage

However, COSATU said it will engage with the department to have workers under expanded public works programmes included in the minimum wage. 

NEASA, on the other hand, said that the increase serves no purpose, as it will simply cause employers who cannot afford the amount, to not employ, or fly under the radar. 

“It serves no purpose to introduce a minimum wage, at any level, where there are no jobs to be had, where employers, both commercial and domestic, are battling to survive,” NEASA said. 

“There are no prospects of the sustained economic growth required to stimulate job creation and the accompanying increases in wages.”

The organisation added that employers who cannot pay more will not pay more simply because they have been mandated to do so by the government. 

COSATU argued against this, saying that “miserly critics of the national minimum wage said it would lead to a jobs bloodbath.”

The union argues that independent research proves that this is not the case, saying that minimum wage increases have had a positive impact on reducing poverty and inequality, whilst boosting economic growth.

NEASA agreed with COSATU, however, on the notion that government employees in expanded public works programmes should be paid the same amount as private sector employees. 

“It is nonsensical for Government to not allow private sector employers and employees to negotiate a lower wage while Government has afforded themselves the right to pay employees almost 50% of the minimum wage under the guise of job creation.”

“Government must stop wasting their time on niceties for purposes of window-dressing their dismal failure at governance and rather adopt economic policies which will actually make a difference to the lives of all South Africans.”