88

In 2019, South Africa introduced a national minimum wage (NMW) of 20 rand per hour. At the time, approximately one third of formal-sector workers earned less than this amount. Although democracy brought labor market reforms, the wage structure was left intact, with sectorally set minimum wages that did little to arrest extreme levels of wage inequality. It is hoped that the NMW will signal a break with the past. During the tripartite negotiation over the NMW, unions and their allies convinced decision-makers that increasing the income of poor wage earners would raise living standards and stimulate demand. However, numerous challenges remain, from the weakness of labor administration to the limited mobilization of precarious workers.