A double-edged sword : the minimum wage and agrarian labour in the Eastern Cape, South Africa, 2003–2014
Authors:   , Naidoo Lalitha 
Published: April 2021

Statutory wage setting and the extension of labour laws to the South African agrarian labour market are path-breaking events that altered the unilateral power which agrarian employers had, under apartheid, to set low wages and harsh employment conditions. Yet, economic sociologists have shown little interest in the agrarian minimum wage in South Africa. Consequently, little to no sociological perspectives are available on the way in which statutory wages shape the setting of actual agrarian wages, employment conditions, labour relations and working and living conditions. At the same time, economic sociology’s neglect of agrarian minimum wages perpetuates the dominance of economics in minimum wage research, as well as the narrow cost-benefit analysis, and firm and employer-centric focus, deployed by both opponents of minimum wages in the neoclassical economics camp and supporters in the heterodox economics camp. The firm-centric focus also applies to the few labour relations scholars who focus on minimum wages. As a result, a wide body of empirical information is available and concentrated in the Global North, on low-waged, urban-based firms’ employment and labour relations strategies with the occasioning of minimum wage laws, with scant to non-existing information on rural-based workers’ experiences in the Global South, at least in the case of South Africa. This thesis addresses the lacuna in existing research, specifically by concentrating on agrarian workers’ narratives of the outcomes of minimum wages on actual wages and conditions, and experiences at the site of production and in the sphere of expanded social reproduction. The conceptual framework of the thesis is rooted in a critical realist meta-theory which directs inquiry towards the search for underlying causes of events with a sensitivity to the interaction of structure and agency, so as to develop explanations of events, which in turn encourage emancipatory thought and praxis. Within this framework, a political economy perspective of the agrarian minimum wage is charted, founded on an inter-disciplinary approach that incorporates economic sociology perspectives, which view markets as socio-political constructs, alongside a Marxist analysis of wages and the distinction between the value of labour and the value of labour power. Also relevant are segmentation labour market models where the focus is on segmentation in labour supply, demand and regulation, and institutional economics that highlights labour’s weak bargaining power in low-waged labour markets. Based on this analytical perspective, the South African agrarian minimum wage is seen as a necessary intervention stemming from post-apartheid uneven neoliberal restructuring processes, to address extremely low agrarian wages that pose threats to the ongoing generation of agrarian labour power. Low agrarian wages are located in unequal power relations in the workplace and are embedded in the totality of the low-waged agrarian labour market, composed of particular features in the supply-side of the labour market (the sphere of social reproduction of labour), the demand-side of the labour market (the site of production), and the forces of regulation (the labour relations regime). The thesis explores new ways of conceptualising minimum wages in the South African context, placing emphasis on the local agrarian labour market, and it highlights the agency of agrarian labour by revealing their struggles, working life and living conditions. In so doing, the research expands inquiry beyond economic “impact” at the level of the firm/employer to examine: (a) workers’ employment trends before and after the minimum wage was introduced, (b) the extent of changes in working and living conditions and labour relations, (c) the scope for workers in animating changes and their struggles and challenges, and (d) shifts in actual wages in relation to prescribed wage rates. Focussing on the aforementioned aspects represents an attempt in this thesis to build on themes, raised in heterodox economics studies, of minimum wages and their relationship to the social devaluation of low-waged work, inequalities in bargaining power, and justice. Based on a stratified sample of workers that included, among other variables, sex, geographical area and agricultural sub-sectors, original data was collected through 52 in-depth interviews, two focus group interviews (comprised of 10 workers), and 501 surveyed workers. The research did not find widespread job losses when minimum wages were introduced, as per neoclassical economics’ predictions. Nor did it find transitions from low- to high-road approaches in employment strategies and labour relations, as claimed by certain heterodox economists. Instead, the findings at the sites of production corroborate the uneven, mixed and contradictory findings of applied heterodox minimum wage studies on employment strategies, labour relations and wage settings. In this light, it is concluded that the agrarian minimum wage had layered outcomes for workers based on key findings, which include: (a) the minimum wage became the maximum wage as actual wages increased and clustered at the prescribed wage rate; (b) a level of gender wage parity close to the level of the prevailing prescribed minimum wage was found, but an overall gendered pattern to low-waged employment surfaced and manifested differently at sub-sector and enterprise levels; (c) though no changes were found in the way work was organised and how workers executed their tasks alongside no fundamental changes in the social relations of production, statutory minimum wages and limitations on working hours did reduce the hours of work and the existence of unpaid overtime work in certain sub-sectors such as livestock and dairy workplaces, through worker and employer initiatives (yet, at the same time, work intensification in compressed working hours appeared in the sample in other worksites, for example citrus workplaces); (d) authoritarian labour relations existed in varying depths and forms, based on sub-sector and enterprise characteristics, which shaped the propensity and scope for worker action; and (e) the layered outcomes of the agrarian minimum wage were felt at the site of social reproduction, where it brought a measure of relief for sampled workers; however, it was chronically inadequate to allow workers to meet their subsistence needs comprehensively. The research findings also highlight sub-sectoral complexities in changing employment and labour relations strategies from low- to high-road approaches in the agrarian sector. The layered outcomes of minimum wages for agrarian workers stems from the combined and uneven amalgamation of pre-existing and new conditions and relations consequent to neoliberalising processes in the agrarian political economy as well as the low minimum wage-setting. The thesis thus argues that the mixed outcomes reflect the layered character of the minimum wage as a conversion factor, which in turn equates to a layered notion of justice. This is because, on the one hand, the minimum wage ameliorates the plight of agrarian labour but, on the other hand, and given the bulwark of authoritarianism, pre-existing conditions and neoliberalising processes, the collective vulnerabilities in the agrarian labour market have expanded and may be intensifying. The agrarian minimum wage acts as a double-edged sword in contexts of mixed and layered outcomes for agrarian labour. A layered perspective of the conversion factor of a minimum wage exposes the possibilities and limitations of statutory wages as a conversion factor, based on context, and identifies the limits and possibilities for worker mobilisation and action. In the case of this research, the agrarian minimum wage deals in limited fashion with the value of labour power because of the initial and subsequent low settings; the minimum wage does not deal with class exploitation and the value of labour, although it sets the frame for instigating basic labour standards. The implications of a layered conversion potential of low minimum wage-settings are profound for conceptualising, theorising and researching the link between statutory wages and justice, with respect to the value of labour power and the value of labour. Future research on the minimum wage based on a Marxist reading of wages and located in real labour markets, strengthens heterodox approaches by deepening theories on the relationship between statutory wages, justice and production.