Minimum wage laws for domestic workers are cruel

Letter to the Editor

Adv. Z.L Madasa MP – ACDP

Tuesday, 20 August 2002


On the surface, the minimum wage laws to be introduced by the Department of Labour from next month seem to prevent abusive labour practices, and this will be true for some domestic workers. Well and good. However, the broader macroeconomic effect of minimum wage laws is to artificially truncate the lower end of the demand for labour, and hence it will increase unemployment. It will deny many first-time job market entrants the opportunity to obtain productive employment, for not every South African is able to compete for a job that will pay at a level above the minimum wage level. In other words, it is like removing the bottom rung of the ladder of economic success, a cruel act that will damn many to a life of dependency.

Stacking the odds in favour of organised labour pushes up the costs of employment. There are always some who benefit, but sadly the macro-effect is that retrenchments continue at a pace and the prospect of employment for our poorest grows dimmer.

It is once more a case of good intentions precipitating unintended consequences. Many employers in this vital sector as I stated in my debate speech on the law, will resort to mechanised alternatives, for example washing machine vendors.

The alternative approach is to deregulate price controls and allow the market to operate efficiently. Instead of penalising those entrepreneurs who are willing to engage others in productive employment, we should rather reward them. Only then will we begin to see employment levels improving and competition for good employees pushing wages up without any government intervention or job losses.


Adv. Z.L. Madasa MP
African Christian Democratic Party