Minimum wages may be hiked by more than 8%, according to govt proposal

• The National Minimum Wage Commission is considering an adjustment to the wage in the range from CPI plus 0.5% and CPI plus 1% for 2023. 
• This adjustment would raise the wage to up to R25.13 per hour, at current inflation rates.
• Since this year, domestic workers receive the same minimum wage as other workers.
• For more financial news, go to the News24 Business front page.

The minimum wage could be hiked by more than 8% next year, according to a new proposal by the Department of Labour's National Minimum Wage (NMW) Commission.

The commission has proposed a hike of the consumer price index (CPI) plus 0.5% to 1%.

In November, CPI reached 7.4%. If a hike of CPI plus 1% is adopted, at the current inflation rate that would increase the minimum wage to around R25.13 per hour. For those working nine hours a day, this works out to a monthly wage of around R4 750.

The minimum wage was hiked by almost 7% in March 2022, from R21.69 to R23.19 an hour. For the first time, domestic workers earned the full minimum wage. In the past, their wages were set below the minimum wage.

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Stakeholders have until 13 January 2023 to respond to the new proposal, said the department.

The NMW chair Professor Adriaan van der Walt said the commission aimed to ensure that the value of the national minimum wage does not decline relative to the median wage.

"All wage-earning workers must earn enough to maintain a decent standard of living, defined as sufficient to support themselves and their families at a level that is both socially acceptable and economically viable," said Van Der Walt.

Food and fuel prices surged in 2022 following the invasion of Ukraine, which triggered an oil price rally and created short-term shortages of grain and cooking oils. As a result, millions of households have struggled with affording transport and food

Bread and cereal prices were almost 20%% higher in November than a year ago, Statistics SA reported. Prices of laundry soap (38%), sunflower oil (+32%) and coffee (+25%) have also skyrocketed.

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But businesses, which have been hit by rocketing interest rates and record load shedding, may balk at the proposed steep rise in the minimum wage.