The Foundation for Rights of Expression and Equality, Free SA, has issued a strong caution against the National Minimum Wage Commission’s proposed wage hike for 2026, calling it a “policy of exclusion” that risks deepening South Africa’s already catastrophic unemployment crisis. In its submission, authored by Free SA Director Paul Maritz, it argues that in a country with low productivity and fragile small businesses, raising the wage floor further is economically irresponsible and socially damaging.
“The minimum wage, while well-intentioned, is being weaponised against the very people it is meant to help,” said Maritz. “When government sets wage floors above what many entry-level workers can justify in terms of productivity, the result is simple: fewer jobs, not better ones.”
The Commission’s proposal to adjust the minimum wage by CPI plus 1.5%, an expected 5–5.5% increase, would push the statutory rate above R30/hour. While sounding generous on paper, Maritz warns that this imposes a rigid wage floor in an economy marked by low productivity, high unemployment, and fragile small enterprises.
“South Africa is not a high-wage, high-productivity country. Yet we insist on legislating like one. That contradiction is not protecting workers, it’s excluding them,” Maritz said.
Free SA emphasises that small businesses, informal traders, and unemployed youth bear the brunt of these policy missteps. For them, a minimum wage that exceeds what entry-level productivity justifies is not a lifeline, it’s a legal barrier to employment.
“The real injustice is not that some people earn too little, but that millions are denied the chance to earn anything at all.”
Maritz points out that while the formal sector shrinks under regulatory pressure, South Africa’s informal economy, cash-based, insecure, and largely invisible, continues to absorb those who can’t find work through legal channels. This shift erodes worker protections and weakens the state’s ability to enforce safety, quality, and labour standards.
The submission also warns of the broader investment implications. Foreign and local investors alike are dissuaded by inflexible labour frameworks that make growth and hiring unpredictable.
“Job creation depends on confidence, and confidence depends on policies that allow businesses to adapt, grow, and hire. We are doing the opposite,” Maritz argued.
Free SA urges the NMWC and the Department of Employment and Labour to adopt a more realistic approach to wage setting, one that prioritises inclusion over ideology.
“Wages must follow productivity, not precede it. In a country with 40% broad unemployment, the goal must be access first, because dignity begins with work.”