Proposed 2026 National Minimum Wage increase offers relief to South African workers

The National Minimum Wage (NMW) Commission has announced its proposed inflation plus 1.5% increase for the NMW in 2026. 

When approved, it will bring welcome relief to 5.5 million farm, domestic, construction, hospitality, transport, retail and other vulnerable workers earning within the NMW range.  This will mean extra money in their pockets helping them take care of their families.

Whilst Cosatu had tabled a slightly higher proposal we appreciate that after difficult negotiations, we were able to prevail and secure the support of the Commission for a positive above inflation adjustment.  There is value in consensus building between government, labour and business.  But this must always be anchored upon uplifting the poor and protecting the most vulnerable in society.

The NMW Act requires the Commission to ensure the value of the NMW is protected from inflationary erosion as well as its ability to alleviate poverty and inequality.  Inserting this progressive provision in the Act was a major victory as we often have seen how similar financial thresholds in other laws be eroded by inflation.

Cosatu is proud it has managed to ensure that since the NMW was introduced in 2019, it has seen positive above inflation increases each year in spite of the tough economic climate.

When the proposed CPI plus 1.5% increase for 2026 is implemented, it will see the NMW break the R30 level.

This will mean that we have managed to double the wages of domestic workers who started off at R15 an hour in 2019, and a 60% increase for farm workers who were originally pegged at R18 an hour.  Overall, it has meant a 50% increase for the NMW which was first introduced at R20. 

Critics demonised Cosatu when the NMW was introduced in 2019. 

Some said it would lead to a jobs bloodbath and the collapse of the economy.  Yet independent research from the University of Cape Town and other leading academic institutions have proven this to be false with no discernible job losses linked to the NMW’s introduction.

If the absence of a NMW was the perquisite to job creation, then South Africa should have enjoyed full employment under the slave wages paid to Black, Coloured and Indian workers during the apartheid era. 

Other armchair critics cried that the NMW was a sellout and would mean nothing to workers.  Yet farm and domestic workers were not so long ago paid as little as R6 an hour, barely enough to have bought half a loaf of bread.  With the NMW soon to breach R30 an hour, it means workers can buy one and a half loaves of bread with an hour’s wages.  Not enough to escape poverty, but a massive step forward for millions of the most impoverished workers.

The NMW has been one of the most important anti-poverty interventions by government led by the African National Congress and President Cyril Ramaphosa in close collaboration with his former Federation, Cosatu, where he cut his political teeth in the 1980s.

Not only does the NMW and its above inflation increases help workers buy food, pay for electricity and transport and other essentials of life, but it also injects stimulus into an economy that has been struggling to grow above 1% since 2008.  It means money flowing into local businesses and thus enabling them to keep the lights on, employ and pay their staff.  It means money spent on goods and services and thus taxes to help fund public services that society and the economy depend upon.

International experience in other major industrialised economies such as the United States and the European Union or in peer countries with similar levels of inequality and poverty, e.g. Brazil, have shown a NMW and positive annual increases have played a major role in reducing poverty and inequality as well as stimulating economic growth and creating jobs.

Whilst we welcome and claim the substantial progress we have made since the introduction of the NMW, we remain deeply aggrieved that government has failed to reduce the gap between the Expanded Public and Community Works Programmes workers with the NMW.

EPWP and CWP workers, amongst society’s most vulnerable and desperate, remain pegged at 55% of the NMW.  Whilst appreciating the state’s limited resources, they are not alone facing this challenge.  EPWP and CWP workers earn the least in society and like everyone else, face the brunt of inflation. 

It is long overdue that EPWP and CWP workers are raised to the NMW level, even if this must be phased in over the Budgetary cycle.

The NMW Commission has gazetted its proposed 2026 inflation plus 1.5% adjustment for public comment.  Submissions from the public must be made by the 12th of January.  We encourage all members of the public to write to the Commission to indicate their support for the increase.

The Commission will then make a final recommendation for the Minister of Employment and Labour’s approval with implementation scheduled for 1 March 2026.

Cosatu is proud of the NMW’s successes, but we are equally angered by those employers who have chosen to ignore it.  Research and experience have shown that such employers tend to ignore most of the labour laws that protect the rights of workers, from occupational health and safety to overtime pay and paid leave or the right to form unions and collective bargaining.

We must do more as the trade union movement to expose and report such employers.  The Department of Employment and Labour must ramp up its inspections of workplaces, in particular the agricultural, transport, household, hospitality and constructions sectors.

The Department needs to expedite the employment of the promised 20 000 additional labour inspectors.  They will be an invaluable boost to enforcing compliance with our labour laws and improving the working conditions of vulnerable workers.

Cosatu is pleased by how far we have come and determined to ensure that all workers enjoy the rights guaranteed to them by the Constitution and our progressive labour laws.

Cosatu General Secretary Solly Phetoe

*** The views expressed here do not necessarily represent those of Independent Media or IOL.

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