Opposition to Further Minimum Wage Increase by Free SA

Johannesburg – Free SA has urged the National Minimum Wage Commission to dismiss any proposals for another increase in the minimum wage in South Africa.

The foundation for rights of expression and equality cautions that another governmental wage increase may further exclude unemployed and inexperienced South Africans from the formal job market.

The National Minimum Wage Commission has initiated a request for written submissions regarding potential changes to the national minimum wage, with responses due by today, Friday, 4 September 2026.

The commission will review these submissions before releasing its annual report and recommendations to the Minister of Employment and Labour later this year.

Free SA contends that this review must start with an understanding of South Africa’s labor market reality: the most pressing issue is not that employed South Africans earn insufficient wages, but that millions of South Africans earn none at all.

As previously stated by Free SA, a mandated wage floor can hinder employment opportunities when it exceeds what many entry-level and inexperienced workers can initially generate.

Employers do not have limitless capacity to absorb increased labor costs.

When faced with higher hiring expenses, businesses may need to hire fewer employees, invest in automation, remain small, shift operations to the informal sector, or simply refrain from hiring altogether.

“South Africa cannot legislate its way to prosperity by continually raising employment costs,” remarked Free SA spokesperson Gideon Joubert.

“For someone who has a job, a higher minimum wage might seem like success.

“However, for a young person eager for their first opportunity, the relevant minimum wage is not the figure the government publishes; it is zero rand, reflecting the reality of unemployment.”

Free SA acknowledges South Africans’ legitimate aspirations for higher wages and improved living standards.

Nevertheless, sustainable wage increases cannot be mandated without regard to productivity, economic expansion, and employers’ financial ability to accommodate them.

The organization stresses that the dilemma facing policymakers isn’t merely between “higher wages” and “lower wages.”

“In a nation confronting severe structural unemployment, policymakers must grapple with the danger that an artificially high wage floor could exclude individuals whose skills, experience, or productivity do not justify the mandated employment costs,” Free SA stated in a release to The Bulrushes.

“This poses a particularly severe risk for young individuals and first-time job seekers.

“Employment itself is a key method for people to gain skills, experience, confidence, and enhanced bargaining power.”

Free SA cautioned that pricing inexperienced workers out of their initial job opportunities could hinder their ability to gain the experience necessary to command higher wages in the future.

This concern has been a central theme in Free SA’s earlier comments regarding the minimum wage.

“The government seeks to elevate people partway up the economic ladder while removing the foundational rungs,” Joubert indicated.

“A first job should not be seen as a final job. It serves as an entry point into the economy, offering a chance to learn, accumulate experience, build an employment record, and enhance productivity.

“The ethical policy is one that maximizes opportunities for individuals to begin their ascent on that ladder.”

Free SA emphasized that further wage hikes would disproportionately burden small, medium, and micro-enterprises, which are far less equipped than large corporations to cope with increased labor and compliance expenses.

A larger company may adjust its operations, invest in automation, or distribute additional costs across a wide customer base.

Conversely, a small business working with tight margins frequently lacks such options.

Confronted with escalating employment expenses, its choices may be confined to raising prices, reducing work hours, delaying recruitment, shrinking its workforce, or shutting down entirely.

Free SA has consistently warned that this strategy risks transforming the minimum wage into a “policy of exclusion,” particularly within an economy marked by low productivity, vulnerable small businesses, and exceptionally high unemployment.

The ramifications extend beyond formal employment.

“When legal employment becomes excessively costly, economic activity does not simply vanish; it can migrate to the informal economy, where workers may enjoy less security and fewer enforceable protections,” the statement noted.

“A policy ostensibly aimed at safeguarding vulnerable workers may unwittingly drive these individuals out of the range of protections.”

Free SA dismisses the notion that opposing another statutory wage increase equates to opposing higher wages.

The organization clarified that it advocates for South Africans to earn more, but that sustainable wage growth should stem from productivity, investment, skills enhancement, entrepreneurship, and competition for workers.

“Firms that improve their productivity and profitability can afford to hire more individuals and pay them better,” Free SA stated.

“Workers who acquire skills and experience become more valuable and obtain increased bargaining power.

“A growing economy fosters competition for labor, which subsequently pressures wages upwards.”

Free SA called on the government to focus on creating a framework that makes it easier, more affordable, and less daunting to employ individuals by reducing unnecessary bureaucracy, reforming restrictive labor laws, and fostering entrepreneurship and investment to provide an environment where small businesses can flourish.

Free SA reiterated its long-held belief that South Africa’s unemployment crisis demands job creation driven by the private sector rather than escalating state intervention in the labor market.

“Prosperity stems from generating value, establishing more businesses, attracting additional investment, and employing more individuals,” Joubert asserted.

“It cannot be fabricated through ministerial decree. Wage increases should result from enhanced productivity and profitability of workers and businesses, not simply from government mandates prohibiting employment below an arbitrary threshold.”

Free SA urges the National Minimum Wage Commission to advocate against raising the national minimum wage in the upcoming adjustments.

The organization posits that the government should recognize that South Africa’s labor market necessitates greater flexibility, especially for young, inexperienced, and long-term unemployed individuals striving to enter the formal job sector.

The nation must also acknowledge the essential difference between safeguarding individuals who currently have jobs and preventing others from obtaining one.

“South Africa has invested years in attempting to protect workers from low wages while millions remain confined to no wages,” Joubert concluded.

“This is not a successful labor policy. Our focus must be to open pathways into the economy for those who are currently locked out. Job creation must be the priority.

“Skills and productivity will follow. Sustainable wage increases are a result of this.

“If we genuinely want South Africans to rise above poverty, we must cease complicating their access to their first job.”

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