South Africa’s President Cyril Ramaphosa has signed into law the national minimum wage bill, his office said on Monday, part of efforts by the government to tackle wage inequality in Africa’s most industrialized economy, Reuters reports.
The National Minimum Wage Act sets South Africa’s minimum wage at 20 rand ($1.45) an hour, equal to 3,500 rand per month. The law will come into force on a date to be determined by Ramaphosa, the presidency said.
Supporters of the minimum wage say it will reduce inequality and stimulate economic growth as workers spend more.
But critics say it could lead to increased unemployment, already at record highs, because some employers won’t be able to afford higher wage bills.
Thousands of union members protested against the proposed minimum wage in April, saying it was too low.
Ramaphosa’s office said in a statement that while the national minimum wage will not end income inequality, it was a first step towards addressing the clamor for a living wage.