South Africa’s minimum hourly wage will increase by 9.6% to 25.42 rand ($1.39) from next month.
The increase outstrips the central bank’s inflation forecast of 5.4% for the year. The announcement on Tuesday in the Government Gazette by Labour Minister Thulas Nxesi was made a day before Finance Minister Enoch Godongwana will present the nation’s budget in which projections for the state’s wage bill will be closely watched.
Under President Cyril Ramaphosa South Africa officially introduced a national minimum wage in January 2019 to protect workers from “unreasonably low wages.” While it’s aimed at reducing the pay gap in one of the world’s most unequal societies, it’s unlikely to have an impact on the living standards of a large part of the population where 33% of the people in the labor market is unemployed.
The increase could threaten food and job security and further strain already hard-pressed producers, Agri SA, a farm lobby group said in an emailed statement.