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Kwanalu

The voice of agriculture . Die stem van landbou . Izwe lezokulima

National minimum wage increase poses threat to agricultural jobs and the sector – Kwanalu

Daily News

Written by

Thobeka Ngema

27 February 2023

Durban — The KwaZulu-Natal Agricultural Union (Kwanalu) has said that the national minimum wage increase for farmworkers will place strain on an already difficult economic climate for the country’s agricultural sector.

This comes after Employment and Labour Minister Thulas Nxesi raised the minimum wage of farmworkers and domestic workers by 9.6%. The increase will take effect from March 1.

Nxesi said the increase will also cover workers employed in the Expanded Public Works Programme (EPWP), learnership allowances, the cleaning sector and wholesale and retail. The percentage increase for farmworkers and domestic workers will translate to R25.42 per hour, while the EPWP will be R13.97 for the same duration. The cleaning sector in the metropolitan areas will enjoy R27.97 and the rest of the country is R25.50.

The significant increase will benefit 892 000 domestic workers who are overwhelmingly women and 800 000 farmworkers.

Kwanalu said the increase would place tremendous strain on an already difficult economic climate for the country’s agricultural sector.

“The increase in the national minimum wage will have a negative impact on the livelihoods it aims to serve, as the agricultural sector struggles to keep afloat following other recent key contributing factors,” said Kwanalu chief executive Sandy La Marque.

Kwanalu’s statement follows statistics shared with the commission by Kwanalu, which were compiled from the Department of Labour’s quarterly statistics and annual reports, as well as submissions from Kwanalu’s member survey, which also included all the commodity groups in KZN.

“These statistics show that specific pressures have, year on year, resulted in a decrease in agricultural employment since 2019 in KZN,” La Marque said.

She said that the pressures outlined in Kwanalu’s report included an increasingly narrow economic production climate, an abnormally high cost of inflation when compared with other sectors due to the nature of inputs, severe incidences of flooding, the impact of the July 2021 unrest, foot-and-mouth disease, deteriorating road and infrastructure conditions, and the significant impacts of the ongoing and increased load-shedding schedules.

“Kwanalu believes that there is insufficient evidence to equitably enforce a greater than consumer price index (CPI) inflation on rural employment, a 0% base rate should have been the departure point. This is relevant as the rural cost of living is lower than the urban cost of living, so it may well be prudent to give agriculture its own minimum wage determination.

“Kwanalu prior to the announcement recommended that an increase of less than CPI is more realistic of the industry position and the impacts on livelihoods of rural employees and dwellers. We will continue to explore options to address the high increase and its impacts,” La Marque said.

Meanwhile, last week, Agri SA centre for excellence on labour chairperson, Johan Wege, said Agri SA was alarmed by the announcement of a 9.6% increase in the national minimum wage. Any increase in costs would further strain already hard-pressed farmers. As the sector battled to contain the costs associated with load shedding, crumbling infrastructure and high input costs, this increase would further undermine food security and put much-needed jobs on the line.

“The increase continues a trend of above-inflation increases for more than a decade. Whereas farmers were previously in a position to absorb these increases thanks to the sustained growth in a number of agricultural industries, that period is now over. The sector faces extreme headwinds, which on their own threaten food security in the coming years,” Wege said.

“Notwithstanding the challenges that the sector faces, Agri SA made a submission proposing a CPI minus 2% increase in the national minimum wage. This proposal recognised the financial pressure on workers in this inflationary environment, but also addressed the reality of farmers’ inability to continue to absorb above-inflation increases. That government has ignored this balanced position is a devastating blow not only for the sector, but also for the consumers who will eventually see this increase reflected in their food expenditure.”