6 August, 2013
farm job losses' despite big minimum wage hike
by Carol Paton, 02 August 2013, 05:51
THE 52% increase in the minimum
wage in agriculture in March has had a remarkably small effect on employment,
giving the lie to dire predictions of masses of jobs to be lost.
The quarterly labour force survey
released this week shows agricultural employment between March and June dropped
26,000, leading agricultural economists to conclude that most farmers had
absorbed the new minimum wage of R105 a day.
The drop amounts to a 3.5%
decline in agricultural employment from a total of 739,000 at the end of March.
The increase in the minimum wage, on the other hand, added a further R2bn to
the wage bill.
University of Pretoria economist
Frikkie Liebenberg said on Thursday: "The drop in employment is a very
small one given the magnitude of the numbers and the size of the increase in
the minimum wage. I don't think that the hype over the minimum wage was
University of Stellenbosch
agricultural economist Nick Vink said that anecdotal evidence collected from
surveys of the top 10 agricultural industries showed job losses would be
nowhere near what had been predicted. Initial modelling by the Bureau for Food
and Agricultural Policy estimated the majority of farms would not be able to
afford the hike. It nonetheless recommended that R105 be the new minimum level
given the extent of poverty and poor nutrition among farm workers. The
assumption was that the effect would be "structural adjustment" which
would involve the consolidation of farming enterprises and large-scale job
Prof Vink said: "Generally,
there does not seem to have been a lot of concern about the R105. I think
everyone agreed that R69 was too low."
Dr Liebenberg said the
explanation for the small decline of the last quarter could lie in the
longer-term trend, which shows steadily rising employment in agriculture since
June 2011. During the same period there has also been a large shift in farms
from casual and seasonal labour to permanent labour.
Using slightly different numbers
to those in the quarterly labour force survey - as he includes workers over the
age of 65 who are excluded in the survey - Dr Liebenberg says in June 2011
total agricultural employment was 621,650. This rose to 759,729 in March this
year. "This is a trend. It is not a one-off blip ... It shows that there is
Dr Liebenberg says the trend
could be due to changes in the nature of farming, which has become more of a
precision business and more mechanised. Permanent rather than casual labour is
required for this kind of work. A second motivation for the shift is that it is
easier to supervise one's own employees rather than those provided by labour
"Seasonal workers bring
instability and risk onto the farms. The trend is now to hire permanent, more
skilled workers. It seems farmers have been able to adjust the production
system in such a way that it is still affordable," he said.
It was also not a simple matter
for farmers to shed large amounts of their labour force.