JOHANNESBURG – COSATU is calling for government to bring back fuel levy relief as soaring prices put households under even more pressure.
Petrol has jumped by over R1 a litre while diesel is up by more than R3.
The federation’s Zanele Sabela said previous fuel levy relief helped protect both workers and the economy.
“For COSATU, what had happened earlier this year with the fuel price relief, where governments suspended a portion of the fuel levy was actually the way to go, because it not only protected the working class and the poor, but it also protected the economy.
“And so, this is what we’re calling for once again, as we see prices continuing to increase. And so that is what we have seen, because we all know that once the price of fuel goes up, it tends to have a trickle-down effect and actually impacts on all other prices.
“This is what we’re calling for. We’re calling for that relief to come through again, because people are just not coping. I mean, people who earn the lowest, they spend up to 40% of their salaries on transport to go and to come back from work. And so obviously, when you look at that, that is not sustainable. “
The National Minimum Wage Commission will soon determine next year’s mandatory wage levels. The exercise rests on a persuasive but perverse moral claim.
Written submissions to the National Minimum Wage Commission on the minimum wage level for 2027 closed on 4 September, after a mere 30 days having been afforded for comment.
The Free Market Foundation urged the Commission to recommend no increase at all, saying minimum wages are “instruments of exclusion that consign millions of South Africans, particularly the young and low-skilled, to enforced idleness”.
The Foundation for Rights of Expression and Equality (Free SA) said much the same, saying a hike “risks shutting even more unemployed and inexperienced South Africans out of the formal labour market”.
They are right. And yet they will be ignored.
The Commission will recommend inflation plus a dollop of cream. The Minister will gazette it. The rate will rise from R30.23 an hour on 1 March, as it has every year since 2019.
Meanwhile official unemployment reached 33.6% in the second quarter, with 8.5 million people out of work. The broader definition of unemployment gives a rate of 46.3%. Among those aged 15 to 24, the unemployment rate is 62.8%.
The moral case for a minimum wage is that some wages are so low that paying them constitutes exploitation, and a decent society does not permit exploitation. It appeals to vague, subjective notions like “decent wage”, or “living wage”.
This moral case intuitively feels right, but it is wrong. It is assumed to be common cause by socialists, but it shouldn’t be. If we’re ever going to make progress against unemployment, it needs to be answered.
The case for minimum wages
Here’s the reasoning. Someone with no savings and no alternative is not really free to refuse an offer of employment, at any wage. Where employers are few and workers many, the employer determines the pay, and the worker takes it. A wage floor corrects that, cheaply, and it reaches people whom unions never will: domestic workers, farm workers – those least able to bargain for themselves.
That is not a stupid argument. But it rests on a false premise, and on a hidden assumption.
The false premise is that not having a choice is not a matter of greedy capitalist exploitation. It is a function of life: “In the sweat of thy face shalt thou eat bread.”
The hidden assumption is that the alternative to a low wage is a higher wage. For millions of South Africans, the alternative to a low wage is no wage. A minimum wage might lift a few people from R20 an hour to R30, but for many R20-earners, it simply destroys their job and offers nothing in its place.
When a person judges that work at R25 an hour beats no work at all, and an employer agrees, the state steps between them and forbids it – for their own good, against their own stated preference.
Every time a person or a company considers hiring someone to do a job of work, the very first question is, “How much will that cost?”
An unsatisfactory answer means a job is not created, and that non-event is never recorded in the economic statistics of the country.
A minimum wage is not protection from exploitation. It is a prohibition on the poor making their own bargains.
Wages are prices
The confusion arises because we discuss wages as though they occupy a special moral category. They do not. A wage is the price of labour, and it behaves like every other price. It is no different from the price of a loaf of bread made by a baker. Paying little for bread that is freely offered at a low price isn’t exploitation. It is how the baker stays competitive, and keeps making a living.
Prices are not rewards for effort or virtue or time. They are signals matching what people want to what others can supply.
Fix a price below the market-clearing level and you get a shortage: rent control produces housing waiting lists; price caps for medicines or fresh produce cause stock-outs and empty shelves.
A minimum wage is a price floor on labour. A price floor produces a surplus of the thing priced, and a surplus of labour is called unemployment. That is not an ideological claim. It is what the words mean. It is basic economics.
An inconvenient pedigree
South Africa’s original minimum wage law was not devised by people who loved the poor. It was devised by people who wanted to price black workers out of jobs.
The Industrial Conciliation Act of 1924 excluded pass-bearing black workers from participating in industrial council wage agreements, while extending those agreements to their wages anyway.
The Wage Act of 1925 created a Wage Board to set minimum rates, described as a “civilised” wage. Today’s equivalent would be “living wage”.
Officially, the law prohibited discrimination on racial grounds, which sounds admirable, until you realise that it prohibited black workers from undercutting the “civilised” wages paid to white workers – relieving them of a rare competitive advantage. Achieving racial exclusion through race-neutral law was a stroke of genius.
Sectors where cheap black labour was required, such as agriculture, mining and domestic service, were simply exempted from the minimum wage law. (Sound familiar? The Extended Public Works Programme is exempted from minimum wage law today.)
William Hutt, then professor of economics at UCT (and not quite as liberal as he might seem, having advocated a weighted franchise to entrench white rule), set all this out in The Economics of the Colour Bar in 1964.
The instrument of a minimum wage has changed hands. Whether intended or not, it has not changed in its effect.
The insiders
The union movement’s role in the liberation struggle was real and honourable. Fosatu built shop-floor power from 1979; Cosatu, launched in December 1985, mounted the stayaways that helped make the country ungovernable. Nobody disputes the crucial role unions played in enabling organised struggle against apartheid, and ultimately, achieving South Africa’s liberation.
But in 1990 Cosatu became the labour wing of the Tripartite Alliance, and – like the South African Communist Party – has co-governed ever since without once contesting an election. It holds a permanent seat at Nedlac, whence almost all labour legislation issues.
Union membership is about 3.8 million out of a working-age population of 42 million, and the public sector now accounts for about half of Cosatu’s affiliate membership.
So, a bloc representing under a tenth of working-age South Africans holds a veto over the terms on which everyone else may seek work – and it uses it. When Treasury proposed a youth wage subsidy in 2012, Cosatu opposed it and counter-protested a Democratic Alliance-led march in support of it.
Unions represent their members. That is their job, and their right. The difficulty is that their members are the employed, whose interests diverge sharply from those of the unemployed.
Every rand added to the cost of hiring benefits the insider and bars the outsider.
An artificially high-wage floor is especially detrimental to young job-seekers, with nothing of note on their CVs. For 18-year-olds, a low-wage job is the first rung on the ladder. In South Africa, the first few rungs are missing, and yet the solons at the Department of Labour are puzzled why youth unemployment is sky-high.
What the numbers show
The Department of Employment and Labour’s own research says that South Africa’s minimum wage as a function of the median wage, known as the Kaitz ratio, increased by 10% between 2019 and 2024. The mid-2024 ratio of nearly 80% of the median wage places South Africa in the top fifth of 63 countries surveyed.
We have a rich-world wage floor and developing-world productivity.
The Development Policy Research Unit, which does the Commission’s own modelling, found the minimum wage cost roughly 227,800 jobs in 2024 alone, and between 322,000 and 543,000 since 2019.
The law is also widely ignored. The Department concedes that 40% of employers don’t comply. In the critically stressed textile town of Newcastle, 92% of factories hold no bargaining council certificate, because the council’s rate exceeds what they can pay and still win orders. Those who get raided simply shut up shop, and the clothing orders go to countries with cheaper labour.
Nicoli Nattrass and Jeremy Seekings documented the mechanism: a union and its city-based employer allies raised wages in low-wage regions, and the work went to Lesotho and China.
Small firms are told the exemption process protects them. It is a fig leaf: relief of at most 10%, for at most twelve months, conditional upon a comprehensive profitability, liquidity and solvency audit. It might cost more to comply than they’ll save. For a firm that cannot afford the minimum wage in the first place, that’s no remedy at all.
Government does not believe its own law anyway. It pays Expanded Public Works Programme workers R16.62 an hour, 55% of the minimum it enforces on everyone else. There is no shortage of applicants. Clearly a lot of workers think that a non-decent, non-living wage is better than no wage at all.
How wages actually rise
Post-war Japan exported cheap textiles, tin toys and plastic gadgets made by badly paid workers. When I grew up, “Japanese” was the by-word for cheap, low-quality junk.
But wages climbed as productivity climbed and Japan increasingly catered to the high-quality end of the market. The work of making cheap junk at low wages moved to Korea and Taiwan, where the pattern repeated.
The pattern repeated. China followed. Hourly manufacturing wages trebled to $3.60 between 2005 and 2016, overtaking Brazil and Mexico and rivalling Portugal and Greece. China is now shedding low-end manufacturing because its workers cost too much. It has crossed what economists call the Lewis turning point, the point at which the over-supply of cheap rural labour is fully absorbed, wages rise, and future growth is challenged by labour shortages.
In none of these cases did a commission gazette the wage increases. Wages rose because employers competed for workers who had grown scarce and productive.
Demand raised wages. Legislation followed, and took the credit. Legislating higher wages first puts the cart before the horse, and means the demand for labour will never arrive.
South Africa tried the reverse. We legislated the wages of a rich country and waited for the productivity and labour demand to turn up. We’re still waiting. It isn’t hard to follow the logical cause-and-effect chain.
What to do
If we want things to change, we must stop doing the same stupid things over and over again. Simply raising minimum wages – and deliberately raising them faster than inflation – will not make South Africa rich. It will not make its workers productive. It will not create demand for employment.
It hasn’t done so for 30 years, and it won’t do so next year, either.
So, here’s what we should do. Abolish the national minimum wage. Entirely. Ditch the sectoral wage determinations.
Repeal section 32 of the Labour Relations Act, which lets the Minister extend a bargaining council agreement to firms that never sat at the table – a provision the Free Market Foundation challenged and lost in 2016, and which is no more defensible now.
Leave unions wholly free to organise, bargain and strike, and to win whatever terms they can – but let their agreements bind only the firms that signed them.
Freedom of association means little if it excludes the freedom not to associate. Contract law means little if one can be bound by contracts to which one never consented.
Wages would then be set how every other price is set: in a negotiation between the parties to the transaction. Some would be low. And that’s okay. In a developing, growing economy, a low wage is a rung, not a ceiling.
The choice facing South Africa’s unemployed is not between a low wage and a decent one. It is between a low wage and nothing at all.
We have spent thirty years assuring them that nothing is the more dignified option, and that lower unemployment is just around the corner. It is time to admit that this is a lie, and that our policy must change if we want to see change in society.
[Image: Newcastle-textiles.webp]
[Caption: A clothing factory floor. Ninety-two percent of Newcastle’s clothing factories hold no bargaining council compliance certificate. (Photo: Joseph Bracken for GroundUp.)]
The views of the writer are not necessarily the views of the Daily Friend or the IRR.
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The Foschini Group (TFG) has been warned by the Congress of South African Trade Unions (COSATU) to consider the impact of its planned store closures on its staff.
TFG told investors on 2 September that it has already closed 85 of its stores in the first half of its financial year, with 400 closures planned in total.
This is due to the underperformance of its stores relative to its Bash online offering, which continues to grow strongly.
TFG has also struggled to compete with imports from fast-fashion giants Shein and Temu, as its sales growth has not kept pace with inflation.
It has been explained that it plans to close hundreds of loss-making stores to reduce the cost of doing business and improve the efficiency of its store portfolio.
In its previous financial year, TFG closed 242 stores in Africa and its global operations. On 2 September, it said another 85 had been closed.
TFG said there are a further 80 stores that are likely to fall within closure parameters during the 2027 financial year, and another 100 stores during each of the following two financial years.
“This consolidation is expected to enhance both profitability and return on capital,” the group said.
These store closures have drawn the attention of South Africa’s largest trade union, COSATU, which issued a warning to TFG on 3 September.
“COSATU calls upon TFG to earnestly consider the impact of store closures on its staff following the announcement to cease operations of 280 African outlets in the next three financial years,” the statement said.
“These planned closures come at a time when artificial intelligence and automation are contributing to the drivers of retrenchments.”
COSATU said workers are often left without adequate compensation or measures to accommodate them in this environment.
“Behind TFG’s popular brands, Foschini, Sportscene, and Markham, are hard-working individuals. The business is where it is today due to the blood and sweat of its staff,” COSATU said.
“The billions it accumulates in sales are due to the toil of workers from operating sewing machines to the sales consultants at stores.”
The union said its affiliates will work to stop this devastating blow to workers across the African continent and find progressive alternatives.
“It is vital that TFG demonstrates solidarity towards its workforce, engages in good faith and finds alternatives to store closures,” COSATU said.
“Throwing workers into the devastating unemployment den should not be the pinnacle of decision-making and solution-finding processes.”
TFG’s financial performance
TFG CEO Anthony Thunström
TFG’s financials do not make for pretty reading as the company’s sales come under pressure at home and abroad in Australia and the United Kingdom.
The retailer’s trading update for the 21-week period from 29 March to 22 August 2026 revealed 0.2% sales growth, far below inflation.
Its flat sales growth was driven by a 3.4% rise in TFG Africa sales and a 2.3% rise in TFG London sales.
However, its Australian business came under significant pressure, with sales falling 4.7% in what TFG describes as its toughest trading environment in history.
It attributes the difficult environment to geopolitical shocks. The Australian businesses have also been impacted by the repositioning of its Tarocash brand.
The only bright spot for the company is its online Bash platform, which grew sales by 54.1%. It now accounts for 15.9% of all of TFG Africa’s sales.
TFG is increasingly betting on Bash and its other digital channels to turn the company’s fortunes around, with it no longer investing heavily in its store footprint.
The retailer’s challenges have not only been external. It has also pursued an aggressive acquisition strategy in recent years.
This strategy aimed to diversify its brand portfolio and improve resilience, alongside accelerating its digital transformation.
The strategy saw TFG acquire Street Fever, White Stuff, JD Sports, Granny Goose, Coricraft, Volpes, Dial-a-Bed, and The Bed Store.
While the acquisitions boosted the retailer’s top-line growth, they came at a severe cost to TFG’s profitability.
To fund its ongoing string of acquisitions, TFG has had to take on higher levels of interest-bearing debt, which has led to the retailer’s finance costs skyrocketing.
TFG’s total finance costs have nearly tripled over the past five years, going from R783.8 million in the 2022 financial year to R2.05 billion in 2026.
The acquisitions have also exposed TFG to severe brand impairments, with the retailer having incurred a devastating R1.02 billion write-down in 2026.
In many ways, the string of acquisitions covered up the retailer’s stagnant organic growth.
Foschini Group faces backlash over plans to close 280 store
The Congress of South African Trade Unions (COSATU) has warned The Foschini Group (TFG) against rushing ahead with plans to close about 280 stores on the continent, saying the retailer must consider the impact on workers as it shifts increasingly towards online sales.
COSATU’s warning comes after TFG announced plans to close about 80 stores by the end of March 2027, followed by a further 200 closures over the subsequent two financial years, as weak physical-store sales and surging online shopping reshape its retail strategy.
The union said TFG should engage with workers and their representatives in good faith and explore alternatives to the closures.
The warning
“The country is confronted by stagnant economic growth, growing at a mere 0.5% quarter-on-quarter in the first quarter of 2026. This has undermined efforts to generate jobs and tackle our stubbornly high unemployment rate of 43.8%,” the union said.
Workers say ratings were slashed with no explanation, even as some wards run with two staff caring for up to 40 patients each.
Workers say ratings were slashed with no explanation, even as some wards run with two staff caring for up to 40 patients each.
PHALABORWA – Workers at Maphutha Malatji Hospital in Namakgale have raised concerns over what they describe as unfair and inconsistent Performance Management and Development System (PMDS) ratings, accusing hospital CEO Dr Sello Rasello of disregarding the recommendations of the Moderation Committee.
According to a labour union representative, the dispute centres on performance ratings awarded to employees after the Moderation Committee assessed their performance for the year.
WATCH: Union workers took to the picket line outside Maphutha Malatji Hospital, demanding answers over ratings they say were unfairly slashed.
The committee, which the union alleges was appointed by Rasello, moderated employees and awarded many of them a rating of four, the highest standard rating under the system. Concerns arose, however, when the hospital head allegedly reduced some of these ratings without providing calculations or reasons for the changes.
The union says PMDS policy requires the head of an institution who is dissatisfied with a moderation outcome to refer the employee’s file back to the Moderation Committee, along with reasons for disagreeing with the rating.
Repeated meetings with Rasello have failed to resolve the matter, the union representative said, alleging that he instead told workers they could lodge a dispute through the appropriate channels.
Workers cite staff shortages
Workers accuse Rasello of arrogance and abuse of power over the disputed ratings, saying his handling of the matter is unfair, particularly given the severe staff shortages and difficult conditions they say they are working under.
They also allege that some wards expected to have eight employees are operating with as few as two, who are responsible for between 30 and 40 patients.
Despite these conditions, some employees allegedly received lower ratings from the hospital head than those recommended by their supervisors.
Union demands intervention
The union argues the ratings carry serious financial consequences for workers, as a lower rating can affect progression to the next salary notch.
The union is calling on the department to intervene, ensure the PMDS policy is followed, and investigate what it describes as an abuse of managerial authority.
Hospital management, when approached for comment, said it would deal with the PMDS concerns in consultation with the district, and requested until September 2 to respond.
COSATU faces growing pressure as ANC-SACP rivalry ahead of local elections forces affiliates to reconsider political support while preserving federation unity. Picture: Kgaogelo Magolego
COSATU finds itself caught between a rock and a hard place ahead of the November local government elections, in which its alliance partners, the ANC and SACP, are set to contest against each other for the first time.
COSATU briefed the media in Johannesburg, where it indicated that affiliates may have to decide which party they are going to support.
COSATU president Zingisa Losi called for patience as the federation struggles to make a choice.
“Firstly, the unity of the federation is sacrosanct. The unity of affiliates within it is important. And so every union has a responsibility to converse this discussion within itself and within the federation and the unions.
“And we have set ourselves a path that takes us to the 15th National Congress, where this discussion will be on the Congress debate floor, where unions will then have a thorough discussion on this issue,” said Losi, effectively deferring the discussion to the federation’s upcoming elective conference.
Losi said COSATU wanted to avoid dividing its affiliates, which are spread across various sectors.
“This federation must not be divided on the basis of whom we are going to choose, because there are issues affecting workers that are central and important, as you would have seen in the statement when we were also taking stock from 2022.
“The challenges confronting workers in the private sector and the shopping sector require workers to be united beyond COSATU. We have a responsibility to unite workers across where they are organised,” she said.
She added that even at the Congress, tensions between the ANC and the SACP would not top its agenda.
“And so this issue must not be the issue when we get to the 15th National Congress. It is just part of the discussions of the 15th National Congress.
“And so, this discussion, we don’t want to pre-empt it or what the outcomes will be.
“We would allow Congress, in the spirit of unity of workers, to engage on it. How then Congress will resolve it, I hope you will all be there. We will all then have to deal with what would have been the outcomes,” said Losi.
The federation’s first deputy president, Mike Shingange, said the federation had learned from previous experiences that it was not wise to prematurely take a position on political issues.
His comments appeared to refer to divisions among affiliates over who should lead the ANC ahead of its 2012 Mangaung conference, which ultimately contributed to the expulsion of the National Union of Metalworkers of South Africa (NUMSA).
