South Africa sets out planned minimum wage level

image copyrightAFP/Getty Images
image captionWorkers have been striking over low wages

South Africa's government has proposed a national minimum wage of 3,500 rand ($242; £199) a month.

About 47% of working South Africans earn less than the wage, which is being introduced to combat income poverty and inequality.

But critics say it could put more people out of work as employers might not be able to afford the higher wages.

The government says it will consult on the issue, but hopes to introduce a minimum wage within two years.

Announcing the rate, which was proposed by a panel of advisers, the country's deputy president Cyril Ramaphosa said: "We are now a step closer to finalising discussions on the national minimum wage. All social partners will now decide what their take is."

He said the panel was not endorsing the proposed figure as a living wage, but wanted to set a minimum payment for workers.

Plan 'favours business'

Wages are politically sensitive in the country, where the official unemployment rate is close to 25%.

One employment expert reckoned the figure was only about a quarter of the amount needed for the upkeep of a typical South African working-class household.

Prof Chris Malikane of the University of Witwatersrand told a Johannesburg radio station: "You would need 12,000 rand to sustain a basic household."

The African National Congress, South Africa's ruling party, supported the proposal calling it "credible and clearly supported by clear evidence".

However, the Economic Freedom Fighters, the country's third largest political party, said the plan "favours business at the expense of workers".

It called for a higher minimum wage of at least 4,500 rand.

South Africa faces a possible downgrade to sub-investment grade by credit ratings agencies next month, with concerns remaining over violent wage strikes.

Moody's currently rates South Africa two notches above subinvestment grade, with a negative outlook, while Fitch and S&P Global Ratings have it just a step above "junk".

However, Mr Ramaphosa said: "We have made tremendous progress on the labour instability issues,"

More on this story