POLITICS
30/05/2018 06:02 SAST | Updated 30/05/2018 06:03 SAST

Trevor Manuel: These Are The Things We Must Do To Fix SA's Economy

At the launch of economist Raymond Parsons' book 'Good Capitalism, Bad Capitalism', Manuel outlined some complex issues SA must resolve to secure both higher employment and a living wage.

Former finance minister Trevor Manuel.
Mike Hutchings / Reuters
Former finance minister Trevor Manuel.

Former finance minister Trevor Manuel says "gaps in policy" need to be addressed in order to confront, among other things, issues surrounding the national minimum wage and unemployment. He made it clear that these are areas of contention that government, labour and business need to sit down and thrash out, if SA's economy is to grow.

Manuel was speaking at the launch of "Good Capitalism, Bad Capitalism", a book penned by economist Raymond Parsons.

Another problem facing the economy is pay inequality.

The former finance minister, who forms part of President Cyril Ramaphosa's team of economic envoys heading the drive for foreign investment, made specific reference to a parliamentary vote in support of the national minimum wage passed on Tuesday.

"Today in Parliament there was a vote in support of the minimum wage. The tragedy... is that 43 percent of working people in South Africa are paid below the R3,500 minimum. Why have we allowed this to happen? It's not the next generation or the previous generation; it is our generation," he said.

He indicated the complexity of trying to strike a balance of ensuring a living wage, while not increasing unemployment.

"I was pretty put out by the way in which the debate on the minimum wage found resonance. For, one moment we would say the minimum wage is a living wage... [but] If you raise it, as you raise it, the tendency towards labour displacement increases. So, is this the inflection point the economy needs? You have to start somewhere; that does not preclude normal collective bargaining from happening."

"We have a few policy gaps that we need to engage with, to understand what should happen for people left behind."

If you are a chartered accountant ... you would probably have a salary benchmarked against your peers ... That then creates a knock-on effect.Trevor Manuel on pay inequality

Manuel said another problem facing the economy is pay inequality.

"If you are a chartered accountant working for a big firm in South Africa, you would probably have a salary benchmarked against your peers elsewhere in the same firm. That then creates a knock-on effect... We've got to sit down and try to deal with these issues."