Proposed minimum wage isn't sustainable in the long run: economist

Economist Dawie Roodt had been speaking to Newswatch after Deputy President Cyril Ramaphosa announced a proposed minimum wage of R3 500 (or R20 an hour) yesterday. 

Roodt says that this rate is quite high and could lead to increased job losses. 

"We have very high levels of unemployment. Reasons why people are not being employed is because of weak economic growth. It is because of things like for example, labour legislation and minimum wages. So I'm afraid, what we're doing, we're tackling this issue of employment totally incorrectly. This is a wrong approach. It's a typical socialist approach and as a result there will be a further increase unemployment in this country," he said. 

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Meanwhile, Neil Coleman, a trade unionist says they welcome the tabling of the report.

"We think the deputy president took a good initiative to commission the report because there have been a lot of delays, a lot of frustration experienced in negotiations and we think this will help to move the process forward. There's a commitment to complete the negotiations by the end of December this year and we think that is achievable. We're now going into our structures and will be considering the concrete recommendations. We will come back with a response," he said.  

Political parties reacted differently to the proposal with the ANC welcoming the announcement while the DA says it is studying the proposals. The EFF rejected the figure, saying business is being prioritised over the workers' needs.