No increase to national minimum wage while unemployment crisis worsens, says Free Market Foundation

FMF Press Release (Economy Growth Business 3)

4 September 2026

Blaai af vir Afrikaanse weergawe.

The Free Market Foundation (FMF) has made a submission to the National Minimum Wage Commission opposing any upwards adjustment to the national minimum wage (NMW), arguing that the worsening unemployment crisis should take precedence over further increases to the statutory wage floor.

The FMF argues that the NMW and broader labour regulations have become barriers to employment for millions of South Africans, particularly young and low-skilled workers, and recommends that the current NMW be frozen while policymakers urgently consider reforms that would make it easier for unemployed people to enter the labour market.

“South Africa cannot afford to prioritise further increases to the cost of employing low-skilled workers while 8.5 million people remain unemployed,” says Zakhele Mthembu, FMF Policy Officer and author of the submission. “The priority must be to remove the barriers that prevent people from finding work in the first place.”

According to the latest Quarterly Labour Force Survey, South Africa’s official unemployment rate rose to 33.6% in the second quarter of 2026, while youth unemployment among those aged 15–34 reached 47.4%. Among those aged 15–24, the unemployment rate reached 62.8%.

The FMF argues that these figures demonstrate the need to reconsider the effects of labour-market regulation on people at the margins of formal employment. The NMW is currently set at R30.23 per ordinary hour, effective from 1 March 2026.

“The relevant choice for many low-skilled South Africans is not between a higher regulated wage and a lower wage,” says Mthembu. “It is between being allowed to work at a mutually agreed wage, and earning nothing at all because the law prevents that employment relationship from taking place.”

The FMF further argues that the effects of the NMW should be considered alongside South Africa’s broader labour regulatory framework, including hiring and dismissal requirements and collective bargaining arrangements. These regulations can increase the cost and risk of employing workers whose productivity is initially low, making employers less willing to hire inexperienced workers.

Rather than simply calling for deregulation, the FMF proposes a targeted alternative through the introduction of a voluntary Job Seekers Exemption Certificate (JSEC). The proposal would allow people who have been unemployed for six months or longer to voluntarily suspend the application of specified labour regulations to their employment for 24 months.

“The Job Seekers Exemption Certificate is not about taking rights away from workers,” says Mthembu. “It is about giving unemployed people the freedom to decide whether the conditions of a particular job are preferable to remaining unemployed.”

Under the proposal, JSEC holders would be able to revoke their certificates at any time, while common-law protections against fraud, violence, and basic contractual abuse would remain in place. The FMF also recommends that participation initially be limited according to employer size and that the proposal be piloted in selected municipalities or special economic zones.

“The people who are most affected by unemployment should have a meaningful say in whether a job is worth taking,” concludes Mthembu. “A system that prevents someone from accepting an opportunity because the state has decided that the terms are unacceptable does not necessarily protect their dignity; it can deny them the opportunity to build experience, earn an income and improve their prospects.”

The FMF recommends that the National Minimum Wage Commission advise the Minister of Employment and Labour to make no upwards adjustment to the NMW, recognise the structural barriers created by labour-market rigidities, and support the introduction and pilot implementation of a voluntary JSEC.

Click here to read the full submission.

Click here to read the full JSEC proposal.

Ends.

***

Geen verhoging van die nasionale minimumloon terwyl die werkloosheidskrisis vererger, sê Vryemarkstigting

4 September 2026

Scroll up for English version.

Die Vryemarkstigting (FMF) het ’n voorlegging by die Nasionale Minimumloonkommissie ingedien waarin enige opwaartse aanpassing van die nasionale minimumloon (NMW) teengestaan word, en argumenteer dat die verslegtende werkloosheidskrisis voorrang moet geniet bo verdere verhogings van die statutêre loonvloer.

Die FMF voer aan dat die NMW en breër arbeidsregulasies hindernisse tot indiensneming geword het vir miljoene Suid-Afrikaners, veral jong en lae-geskoolde werkers, en beveel aan dat die huidige NMW bevries word terwyl beleidmakers dringend hervormings oorweeg wat dit vir werkloses makliker sal maak om die arbeidsmark te betree.

“Suid-Afrika kan dit nie bekostig om verdere verhogings in die koste van die indiensneming van lae-geskoolde werkers te prioritiseer terwyl 8,5 miljoen mense werkloos bly nie,” sê Zakhele Mthembu, FMF-Beleidbeampte en outeur van die voorlegging. “Die prioriteit moet wees om die hindernisse te verwyder wat mense in die eerste plek verhinder om werk te vind.”

Volgens die jongste Kwartaallikse Arbeidskragemagpeiling het Suid-Afrika se amptelike werkloosheidsyfer in die tweede kwartaal van 2026 tot 33,6% gestyg, terwyl jeugwerkloosheid onder diegene tussen 15 en 34 jaar 47,4% bereik het. Onder diegene tussen 15 en 24 jaar het die werkloosheidsyfer 62,8% bereik.

Die FMF voer aan dat hierdie syfers die noodsaaklikheid toon om die uitwerking van arbeidsmarkregulering op mense aan die rand van formele indiensneming te heroorweeg. Die NMW is tans op R30,23 per gewone uur vasgestel, van krag vanaf 1 Maart 2026.

“Die tersaaklike keuse vir baie lae-geskoolde Suid-Afrikaners is nie tussen ’n hoër gereguleerde loon en ’n laer loon nie,” sê Mthembu. “Dit is tussen die vryheid om teen ’n onderling ooreengekome loon te werk, en om niks te verdien nie omdat die wet daardie indiensnemingsverhouding verhinder.”

Die FMF voer verder aan dat die uitwerking van die NMW tesame met Suid-Afrika se breër arbeidsregulatoriese raamwerk oorweeg moet word, insluitend aanstellings- en ontslagvereistes en kollektiewe bedingingsreëlings. Hierdie regulasies kan die koste en risiko verhoog om werkers in diens te neem wie se produktiwiteit aanvanklik laag is, wat werkgewers minder bereid maak om onervare werkers aan te stel.

Eerder as om bloot vir deregulering te pleit, stel die FMF ’n geteikende alternatief voor deur die instelling van ’n vrywillige Werksoekersvrystellingsertifikaat (JSEC). Die voorstel sou mense wat ses maande of langer werkloos is, in staat stel om vrywillig die toepassing van bepaalde arbeidsregulasies op hul indiensneming vir 24 maande op te skort.

“Die Werksoekersvrystellingsertifikaat gaan nie daaroor om regte van werkers weg te neem nie,” sê Mthembu. “Dit gaan daaroor om werkloses die vryheid te gee om te besluit of die voorwaardes van ’n bepaalde betrekking verkiesliker is as om werkloos te bly.”

Kragtens die voorstel sou JSEC-houers hul sertifikate te eniger tyd kan herroep, terwyl gemeneregbeskerming teen bedrog, geweld, en basiese kontraktuele misbruik in stand bly. Die FMF beveel ook aan dat deelname aanvanklik volgens werkgewergrootte beperk word en dat die voorstel in geselekteerde munisipaliteite of spesiale ekonomiese sones geloots word.

“Die mense wat die meeste deur werkloosheid geraak word, behoort ’n betekenisvolle sê te hê oor of ’n betrekking die moeite werd is om te aanvaar,” sluit Mthembu af. “’n Stelsel wat iemand verhinder om ’n geleentheid te aanvaar omdat die staat besluit het dat die voorwaardes onaanvaarbaar is, beskerm nie noodwendig hul waardigheid nie; dit kan hulle die geleentheid ontneem om ervaring op te doen, ’n inkomste te verdien en hul vooruitsigte te verbeter.”

Die FMF beveel aan dat die Nasionale Minimumloonkommissie die Minister van Indiensneming en Arbeid adviseer om geen opwaartse aanpassing van die NMW te maak nie, die strukturele hindernisse te erken wat deur rigiditeite in die arbeidsmark geskep word, en die instelling en loodsimplementering van ’n vrywillige JSEC te steun.

Klik hier om die volledige voorlegging te lees.

Klik hier om die volledige JSEC-voorstel te lees.

Einde.

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