Tuesday, July 21, 2026
SUBSCRIBE
22 GLOBAL MEDIA AWARDS
Food For Mzansi
  • News
  • Changemakers
  • Lifestyle
  • Farmer’s Inside Track
  • Food for Thought
No Result
View All Result
  • News
  • Changemakers
  • Lifestyle
  • Farmer’s Inside Track
  • Food for Thought
No Result
View All Result
Food For Mzansi
No Result
View All Result
in News

Minimum wage boosts farmworkers, lowers poverty – study

We delve into a study by researchers Ihsaan Bassier and Vimal Ranchhod, uncovering how the minimum wage hike positively impacted wages, employment, and poverty rates among South African farmworkers. Bassier also explains the implications of their findings for future minimum wage policies

by Octavia Avesca Spandiel
15th May 2024
Ihsaan Bassier, a London School of Economics researcher, said the national minimum wage has brought a meaningful impact on farmworkers' lives. Photo: Supplied/Food For Mzansi

Ihsaan Bassier, a London School of Economics researcher, said the national minimum wage has brought a meaningful impact on farmworkers' lives. Photo: Supplied/Food For Mzansi

Share on FacebookShare on TwitterShare on WhatsApp

The implementation of minimum wage policies is often a contentious issue, with debates surrounding its potential impacts on employment, poverty rates, and overall economic welfare.

A recent study by Ihsaan Bassier, a researcher at the London School of Economics and Political Science, and Vimal Ranchhod, a researcher at the University of Cape Town, scrutinises the immediate aftermath of the wage increase. It offers valuable insights into the effects on wages, employment dynamics, household income, and poverty rates within the agricultural sector.

Food For Mzansi discussed the findings of the study with Bassier and the repercussions of the 2013 minimum wage hike on South African farmworkers. He also explains the implications of their findings for future minimum wage policies.


Octavia Avesca Spandiel: Quite a detailed study, Ihsaan. What were the main findings?

Ihsaan Bassier: On average, across all workers, we estimated one quarter later that the minimum wage increased hourly wages by 5.6%, increased the chance that a worker stayed employed, increased household income by about 6.3%, and decreased the poverty rate. However, these effects varied by how much workers were paid before the new minimum wage.

Why are agriculture and the role farmworkers play so important?

South Africa’s agricultural sector is a low-wage industry contributing about 2% of gross domestic product (GDP). Over the last four decades, the sector has shed jobs and relied increasingly on casual labour (seasonal workers).

Farmworkers have among the lowest average wages in the country, with poor living and working conditions. While farmworkers account for less than 5% of all employment, they comprise about half of employment in rural formal areas.


Related stories
  • ICYMI: Minimum wage families hit hard by soaring food prices
  • Farmworker indaba sheds light on social challenges on wine farms
  • Unheard no more: How farmworkers’ votes can drive change

How does non-compliance with the new minimum wage impact the effectiveness of the policy?

Our results indicated low minimum wage compliance among the lowest-paid workers, that is, some employers who were initially paying workers the least did not comply with the new minimum wage. 

On the one hand, this undermines the policy because it is illegal and means workers who should have been paid more were not. On the other hand, it may also have lessened its negative effects if employers who did not comply were the employers with the lowest profit margins and would have had to shut down or retrench many workers if they did in fact comply.

Consistent with this, we found much weaker compliance in small firms, where we would otherwise expect the most negative effects on employment.

Another explanation is that the lowest paid workers were the workers least able to force employers to comply, and these employers were more likely to keep them employed as a result. If this is the case, then higher compliance would have meant workers’ wages and poverty rates would have improved even more with compliance.

How did the minimum wage increase affect household income and poverty rates among farmworkers in the short term?

Workers paid just below the new minimum had the biggest wage gains, about 10%, with little effect on employment, and a 5% point decline in the poverty rate.

On the other hand, counterintuitively, those who were initially the lowest-paid workers had the smallest wage gains, about 6%, with an increase in the probability of retaining employment, and a similar 5% point decrease in the poverty rate.

Looking ahead, what are the implications of these findings for future minimum wage policies?

Firstly, these positive short-run effects of such a large minimum wage increase provide some optimism that such policy changes do substantially improve the lives of poorly paid workers. 

Farm employers warned at the time that the higher wages would result in large job losses, and at least in the short term according to our results, this does not seem to be the case. Our study provides reason for optimism about the effects of minimum wage policies on poverty, and one can think similarly for other policy interventions in the agricultural sector.

Secondly, the level of non-compliance is both concerning and complicated. Since some of the non-compliance may have been desirable (if it prevented retrenchments) while some of the non-compliance may have been undesirable (for those who could afford the increase without retrenchments), it would be better for policy purposes if there was both stricter enforcement of the minimum wage together with better engagement on the current “exceptions” policy that allows sub-minimum pay for struggling farm employers.

ALSO READ: Farmers divided over new climate response fund

Sign up for Mzansi Today: Your daily take on the news and happenings from the agriculture value chain

Octavia Avesca Spandiel

Raised by a close-knitted family who loves her deeply, Octavia believes in the philosophy of ‘I am because you are'. This former news and content editor for radio is now living her best life in the agricultural sector as a commercial journalist at Food For Mzansi. Her soft spot for poetry and passion for life, writing and traveling inspires her to write compelling stories. Apart from being an excellent writer, Octavia has an educational background in youth work and loves working with people. 

Tags: Commercialised farmerCommercialising farmerdepartment of employment and labourInform melabournational minimum wage
The Forest of Renewal at Rustlers Valley celebrates the intertwined legacies of Frik Grobbelaar, Anton Chaka and Riky Rick, inviting South Africans to restore the land while cultivating hope, belonging and community. Illustration: ChatGPT
Food for Thought

Rustlers Valley offers a blueprint for South Africa’s renewal

by Ivor Price
18th July 2026

As the Rustlers Valley Memorial Forest is launched in the eastern Free State this weekend, Ivor Price reflects on why...

Read moreDetails
Grain SA appoints Mabuza to lead farmer development

Rising stars: 2026 PGP finalists redefining SA grain farming

18th July 2026
Rooibos heads to space in groundbreaking Mzansi experiment

Rooibos heads to space in groundbreaking Mzansi experiment

18th July 2026

Seriti Institute CEO wins prestigious Best Woman 2026 CSI award

17th July 2026
Farmers and brewers call for budget that builds, not breaks

Minister details Land Bank’s success in boosting black farmers

17th July 2026

Early harvest and larger crops mark unusual 2026 lemon season

Grain SA defends farmers against blame for rising food prices

How this KZN agricultural advisor is bringing tech to rural fields

This week’s agri events: 20 – 24 July

Rustlers Valley offers a blueprint for South Africa’s renewal

Join Food For Mzansi's WhatsApp channel for the latest updates!

JOIN NOW!
Next Post
Snakes on a plate? Explore snake farming from food to antivenom

Snakes on a plate? Explore snake farming from food to antivenom

THE NEW FACE OF SOUTH AFRICAN AGRICULTURE

With 21 global awards in the first six years of its existence, Food For Mzansi is much more than an agriculture publication. It is a movement, unashamedly saluting the unsung heroes of South African agriculture. We believe in the power of agriculture to promote nation building and social cohesion by telling stories that are often overlooked by broader society.

Smart vineyard irrigation starts below the ground

Treat food processing as essential national infrastructure – Khoury

Farmers urged to embrace uncertainty and build resilience

SA poultry industry calls for urgent bird flu vaccine rollout

Mother’s legacy, neighbour’s grace: Venessa Simelane’s farm story

Deadline looms: Register water use by 23 July or risk penalties

  • Awards & Global Impact
  • Our Story
  • Contact Us
  • Cookie Policy
  • Privacy Policy
  • Copyright

Contact us
Office: +27 21 879 1824
News: info@foodformzansi.co.za
Advertising: sales@foodformzansi.co.za

Contact us
Office: +27 21 879 1824
News: info@foodformzansi.co.za
Advertising: sales@foodformzansi.co.za

  • Awards & Global Impact
  • Our Story
  • Contact Us
  • Cookie Policy
  • Privacy Policy
  • Copyright

Chat Options

I'm Lerato, your AI assistant!
No Result
View All Result
  • News
  • Changemakers
  • Lifestyle
  • Farmer’s Inside Track
  • Food for Thought

Copyright © 2024 Food for Mzansi

This website uses cookies. By continuing to use this website you are giving consent to cookies being used. Visit our Privacy and Cookie Policy.