Supporters of the minimum wage say it will reduce inequality and stimulate economic growth as workers spend more. But critics say it could lead to increased unemployment.

President Cyril Ramaphosa signed the law in November and the new National Minimum Wage Act will come into force on the first day of the New Year.
President Cyril Ramaphosa signed the law in November and the new National Minimum Wage Act will come into force on the first day of the New Year. (TRTWorld)

South Africa's new national minimum wage will take effect from January 1, President Cyril Ramaphosa said earlier this month, ensuring workers earn $1.42 an hour in Africa's most industrialised economy.

Ramaphosa last month signed into law the national minimum wage bill, part of efforts by the government to tackle wage inequality in South Africa.

The National Minimum Wage Act sets the minimum wage at 20 rand ($1.42) an hour, equal to 3,500 rand per month.

TRT World's Crystal Orderson reports.

Mixed reactions

Supporters of the minimum wage say it will reduce inequality and stimulate economic growth as workers spend more.

But critics say it could lead to increased unemployment, already at record highs, because some employers won't be able to afford to pay the minimum wage.

The government has said that while the national minimum wage will not end income inequality, it was the first step towards addressing the clamour for a living wage.

Source: Reuters