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Parliamentary hearings: Towards a national minimum wage: What do we know about wages and employment in agriculture?

This presentation by Ruth Hall argues that agriculture is a good sector to learn from when considering a national minimum wage because it is historically a low-wage sector, has been shedding jobs and is enormously diverse. A minimum wage was introduced recently (2003) and the outcomes have partly contradicted predictions, especially since the 50% increase in 2013. Children living on commercial farms are more likely to be stunted and underweight than any other children – almost one in three. Only one in four children on commercial farms are ‘food secure’. Minimum wage is one contribution towards taking people out of poverty but it cannot achieve this by itself. The best justification for minimum wage is to reduce inequality between sectors – i.e. preventing super-exploitation in one sector while regulating others. Although the sector shed jobs between 2008 and 2011, employment has bounced back by 9.7% in the first two quarters of 2013, probably due to good commodity prices (resulting from higher exchange rates). The earlier dramatic job losses were not due to the minimum wage, but due to macroeconomic conditions: the primary force of long-run change underway is the product of deregulation and liberalisation policies – rather than wages. Even with substantial increases in wages, worker households would unlikely be able to afford sufficient nutritious food – ie. even R150 was too little, but farmers could not afford any increase above R10-R20 per person per day. Wage policy cannot and should not be used to compensate for the failures of macro-economic policy and trade policy to provide for a sustainable growth environment for agriculture.