Johannesburg – Free SA has called on the National Minimum Wage Commission to reject any further increase in South Africa’s minimum wage.
The foundation for rights of expression and equality also warns that another government-mandated wage hike risks shutting even more unemployed and inexperienced South Africans out of the formal labour market.
The National Minimum Wage Commission has formally invited written representations on possible adjustments to the national minimum wage, with submissions due by today, Friday, 4 September 2026.
It will consider these representations before publishing its annual report and recommendations to the Minister of Employment and Labour later this year.
Free SA said it believes this review must begin with the reality of South Africa’s labour market: the country’s most urgent challenge is not that employed South Africans earn too little, but that millions of South Africans have no wage at all.
As Free SA has previously argued, a statutory wage floor becomes a barrier to employment when it is set above what many entry-level and inexperienced workers can initially produce.
Employers do not have an unlimited capacity to absorb higher labour costs.
Faced with a more expensive hire, businesses can employ fewer people, automate, remain small, move activity into the informal economy, or simply decide not to hire at all.
“South Africa cannot regulate itself into prosperity by continuously making it more expensive to employ people,” said Free SA spokesperson Gideon Joubert.
“For someone who already has a job, a higher minimum wage may look like a victory.
“But for the young person desperate for a first opportunity, the relevant minimum wage is not whatever number government prints in the Gazette.
“It is zero rand, because that is what unemployment pays.”
Free SA said it recognises the legitimate desire for South Africans to earn higher wages and enjoy a better standard of living.
But higher wages cannot sustainably be legislated independently of productivity, economic growth and the ability of employers to pay them.
Free SA said the choice confronting policymakers is therefore not simply between “higher wages” and “lower wages”.
“In a country with severe structural unemployment, policymakers must also confront the risk that an artificially high wage floor excludes those whose skills, experience or productivity do not yet justify the statutory cost of employing them,” Free SA said in a statement made available to The Bulrushes.
“This is particularly damaging to young people and first-time jobseekers.
“Employment itself is one of the primary means by which people acquire skills, experience, confidence and greater bargaining power.”
Free SA warned that pricing inexperienced workers out of their first job could prevent them from gaining the very experience that would enable them to command higher wages later.
This is a central concern raised in Free SA’s previous submissions on the minimum wage.
“Government is trying to start people halfway up the economic ladder while removing the bottom rungs,” Joubert said.
“A first job does not have to be a final job. It is an entry point into the economy, an opportunity to learn, gain experience, build a record of employment and become more productive.
“The humane policy is one that gives people the greatest possible opportunity to get onto that ladder in the first place.”
Free SA said further increases also place disproportionate pressure on small, medium and micro-enterprises, which have far less capacity than large corporations to absorb additional labour and compliance costs.
A large company may be able to restructure operations, invest in automation or spread additional costs across a substantial customer base.
A small business operating on narrow margins frequently has no such options.
Faced with rising employment costs, its choices may be limited to increasing prices, cutting working hours, postponing recruitment, reducing its workforce or closing altogether.
Free SA said it has consistently warned that this approach risks turning the minimum wage into a “policy of exclusion”, particularly in an economy characterised by low productivity, fragile small businesses and exceptionally high unemployment.
The consequences also extend beyond formal employment.
“When legal employment becomes prohibitively expensive, economic activity does not necessarily disappear; it can migrate into the informal economy, where workers may have less security and fewer enforceable protections,” the statement said.
“A policy ostensibly intended to protect vulnerable workers can therefore have the unintended consequence of pushing vulnerable people beyond the reach of those protections.”
Free SA said it rejects the assumption that opposing another statutory increase amounts to opposing higher wages.
The organisation stated that it wants South Africans to earn more, but sustainable wage growth must be driven by productivity, investment, skills development, entrepreneurship and competition for workers.
“Businesses that become more productive and profitable can afford to hire more people and pay them more,” said Free SA.
“Workers who gain skills and experience become more valuable and acquire greater bargaining power.
“An expanding economy creates competition for labour, which itself places upward pressure on wages.”
Free SA said the government should focus on making it easier, cheaper and less risky to employ people by reducing unnecessary red tape, reforming restrictive labour regulations, encouraging entrepreneurship and investment, and creating an environment in which small businesses can expand.
Free SA reiterated its longstanding argument that South Africa’s unemployment crisis requires private-sector-led job creation rather than ever greater state intervention in the labour market.
“Prosperity comes from producing more value, building more businesses, attracting more investment and employing more people,” Joubert said.
“It cannot be created by ministerial decree. Wages should rise because workers and businesses are becoming more productive and prosperous, not because government has made it illegal to employ somebody below an arbitrary threshold.”
Free SA urges the National Minimum Wage Commission to recommend that the national minimum wage not be increased in the forthcoming adjustment.
Free SA said, instead, government should acknowledge that South Africa’s labour market requires greater flexibility, particularly for young, inexperienced and long-term unemployed people attempting to enter formal employment.
The country must also recognise the fundamental difference between protecting somebody who already has a job and preventing somebody else from obtaining one.
“South Africa has spent years trying to protect people from low wages while millions remain trapped on no wages,” Joubert concluded.
“That is not a successful labour policy. Our priority must be to open the doors of the economy to people who are currently locked outside them. Jobs come first.
“Skills and productivity follow. Sustainable wage growth follows from that.
“If we genuinely want South Africans to escape poverty, we must stop making their first job increasingly difficult to obtain.”
