Expert: Higher minimum wage could boost economic growth
A consumer expert believes we would see better economic growth if the national minimum wage was raised.
There has been mixed reaction to a possible increase since the first round of public comments ended on Monday.
The current legal hourly minimum wage of R27.58 translates to a salary of around R4 400 per month.
Mervyn Abrahams of the Pietermaritzburg Economic Justice and Dignity Group says the figure is below the poverty line, with only 40 per cent left for food after spending on transport and electricity.
Abrahams says poor nutrition leads to low economic productivity.
READ: Union wants hefty hike in national minimum wage
"It is a contributor to low educational outcomes and hence to low economic growth. So keeping the national minimum wage very low in South Africa as it is currently, in fact, will only perpetuate low economic growth."
He adds that there is also no evidence that raising the minimum wage would lead to job scarcity.
"When there is an R100 million bonus paid out to various CEOs, we do not hear economists complain about the inflationary nature of that bonus when we know that R100 million could quite easily change a national minimum wage increase of inflation plus two per cent. So there is a disconnection within the analysis."
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