A South African civil rights organisation has called on the National Minimum Wage Commission to reject any further wage increases, warning that higher statutory pay floors risk locking millions of unemployed people out of the formal labour market.
Free SA submitted its position to the commission as the deadline for written representations closed on Friday, arguing that the country’s most urgent challenge is not that employed workers earn too little, but that millions have no wage at all.
The National Minimum Wage Commission invited public submissions on possible adjustments to the national minimum wage earlier this year. It will consider representations before publishing its annual report and recommendations to the Minister of Employment and Labour later this year.
Entry-level workers priced out, group warns
The organisation argues that a statutory wage floor becomes a barrier to employment when set above what many entry-level and inexperienced workers can initially produce in value.
“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.”
The group maintains that employers faced with higher labour costs typically respond by employing fewer people, automating processes, remaining small, moving activity into the informal economy, or avoiding new hires altogether.
First jobs critical for skills development
Free SA emphasises that employment itself is a primary means by which people acquire skills, experience and greater bargaining power. Pricing inexperienced workers out of their first job can prevent them from gaining the experience needed to command higher wages later.
“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 organisation also highlighted the pressure that wage increases place on small, medium and micro-enterprises, which have less capacity than large corporations to absorb additional labour and compliance costs.
Informal economy risks
Free SA warns that when legal employment becomes prohibitively expensive, economic activity can migrate into the informal economy, where workers may have less security and fewer enforceable protections.
The group rejects the assumption that opposing statutory increases amounts to opposing higher wages, arguing instead that sustainable wage growth must be driven by productivity, investment, skills development, entrepreneurship and competition for workers.
“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.”
The organisation urges government to focus on making it easier and less risky to employ people by reducing red tape, reforming labour regulations, and creating an environment in which small businesses can expand.
- The Foundation for Rights of Expression and Equality (Free SA) is a civil rights organisation that advocates for democracy, equality and government accountability in South Africa. The group engages with Parliament and policymakers on issues affecting governance, public policy and legislation.
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