Minimum wage increase won’t help SA economy

Die Vryburger

The proposed implementation of a minimum wage in South Africa is an admission by the ANC government that it has failed miserably in ensuring adequate economic growth to eradicate poverty and unemployment.

Due to the high levels of poverty in our country, there is a lot of sympathy for the millions of people who live below the breadline and it would be inhumane to turn a blind eye to the plight of the unemployed, women, children and animals. The protests that occur on a daily basis right across the country are symptomatic of the critical state of affairs.

The ANC is to blame for the suffering of humans and animals in South Africa. If the ANC used its time as ruling party to create a climate conducive to an annual economic growth rate of approximately 6%, things would have been a lot different as millions of job opportunities would have been created.

The damage that the ANC government’s policy did to the country’s economy is extensive. Numerous opportunities to create jobs were lost and a lot of value was destroyed as many businesses simply closed their doors and investors took their money and invested it elsewhere.

During the public hearings on the Protection of Investment Act, the American Chamber of Commerce warned that the legislation will prevent trillions of dollars from coming into South Africa. The ANC government pushed through the act, nonetheless, and today South Africa’s trade balance is negative with very little foreign investment.

The FF Plus is, therefore, very sceptical of President Cyril Ramaphosa’s attempt to attract investments of 100 billion dollars to South Africa. How is he going to achieve that with policies about which numerous international trade partners have voiced their misgivings; like BEE, high taxes and expropriation without compensation?

If greater economic freedom is allowed, many problems related to inequality will be solved. A good example is America’s strong economic growth – company profits are 22% higher than last year and investments increased with 19%. The reason for that is the new administration’s lower tax rate and deregulation.

A minimum wage may sound honourable, but it will only make the problem of inequality worse. South Africa must urgently find new ways to stimulate economic growth and to look after the unemployed, whose numbers will no doubt increase significantly with the implementation of a minimum wage.

The quickest way to do this would be to get rid of the government that has created this problematic situation over the last 24 years.

Read the original article in Afrikaans on Die Vryburger

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