Employment and Inequality Challenges Facing South African Agriculture in a Minimum Wage Dispensation

Abstract

South Africa is regarded as the most unequal society in the world. This together with a high unemployment rate places increased pressure on entrepreneurs and government. Government has opted to introduce a national minimum wage (NMW) in order to address these problems. However, a minimum wage holds many challenges, especially for the agriculture sector. The purpose of this study is to identify the challenges facing the South African agriculture sector in terms of the NMW. A literature review is conducted, which allows for analysis of the minimum wage dispensation with specific reference to the South African agriculture sector. This analysis, and the relevance thereof in terms of employment and inequality, is depicted by means of a conceptual model. From the literature review conducted it is clear that the impact of the external environment cannot be ignored in the agriculture sector. It also becomes evident that although the NMW was introduced to reduce poverty, it may potentially hold negative consequences for sustainable employment, which may increase inequality and unemployment.