Transcript BASIC MINIMUM WAGE

BASIC MINIMUM WAGE
SOUTH AFRICAN CHAMBER OF COMMERCE AND INDUSTRY
A n d rew L a y m a n
RESEARCH FINDINGS
16 examples of mandatory minimum wage
6 had positive impact (on economy and employment)
6 had negative impact
4 neutral
Must consider BMW in the context of socio-economic conditions
BRAZILIAN EXAMPLE (2002 – 10)
17 million new jobs
Unemployment from 11,5% → 6,1%
Formal: Informal sector
3:1
20 million relieved of poverty
National minimum wage increased by 81%
Cause or effect?
Consider distribution of prosperity
Are we prosperous despite some individuals’ wealth?
THAI EXAMPLE (2012)
8% more productivity to mitigate extra employment costs
Increase in inflation (1%)
1,7% decline in GDP
5,5% less employment
CONSUMPTION VS PRODUCTION
62% of GDP in 2013 (excludes public sector consumption)
….. And growing
Australia 55%
China
34%
France
55%
Germany 56%
JOB CREATION/SMALL BUSINESS
Target: 49 000 @ 20% pa → 11 million jobs
Too many impediments to employment
Legislation
Red tape
Wage demands
Adversarial employer/employee relations
Strikes and demonstrations
CONCLUSION
This is not a good time for a Basic Minimum Wage
Achievement of accelerated economic growth requires focus and no
distractions
Existing mechanisms (determinations + legislation) are sufficient