FMF Evidence on the proposed Minimum Wage presented to the Parliamentary Portfolio Committee on Labour by economist Loane Sharpe

On Friday, 5 September, in the Old Assembly Chamber, Parliament’s Portfolio Committee on Labour heard submissions regarding the proposed national minimum wage. The day was set aside for submissions from various business associations and other organisations. The proceedings were so muddled and disrupted that only two submissions were heard, namely the Free Market Foundation (FMF) and the National Employers’ Association of SA (NEASA).

The FMF’s submission consisted of giving each member of the portfolio committee a copy of its path-breaking book “Jobs, Jobs, Jobs”, edited by Temba Nolutshungu, followed by a short 20-minute statement of the FMF’s position on the national minimum wage. The FMF’s Loane Sharp told the committee: “A national minimum wage would hurt those it is intended to help, namely inexperienced African youth”. Sharp also argued, “Cosatu’s support for the minimum wage served, not job-seekers, but Cosatu members who aim to exclude competition from young job-seekers for positions held by older, established, unionised workers…[and that] any employee whose productivity does not justify the minimum wage will be retrenched or, worse, not employed in the first place”.

Sharp concluded his presentation by recommending that the Committee should insist on an independent Regulatory Impact Assessment (RIA) to assist them in their deliberations. This recommendation was immediately denounced and a vigorous debate ensued. Over the next two hours, Sharp responded to about 50 questions. During the course of the day, as the tide of opinion swung against the minimum wage, the number of Cosatu observers trebled. Sharp objected on several occasions to Cosatu observers with no official standing in the Chamber behaving as questioner, respondent and chair throughout much of the session.

Sharp was personally threatened by the Cosatu observers three times during the proceedings. He was told that, by expressing free market views, he had made himself “unsafe”; his views were “dangerous”; and he would be “targeted” for supporting these views. Sharp objected to these personal attacks and to the fact that the Committee was not following proper procedure – the minimum wage first needed to be debated at Nedlac. His objections were denounced.

By the time the session was adjourned, it was clear that a national minimum wage is a fait accompli and that, in the rush to push the proposal through, there are serious objections that will not be given a proper hearing.

The book “Jobs, Jobs, Jobs” is available from the Free Market Foundation at 011 8840270 or

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