Tag Archives: Minimum Wage

Farmworkers’ minimum wage increase impacts on wine farm sustainability!

A study conducted by VinPro, a service organisation for 3600 South African wine producer members focusing on their commercial sustainability, shows that the increase in the new minimum wage by 52% will reduce the profitability of wine producers by 60%, ‘the sustainability of the industry now being under serious threat‘, reports Cape Business News.

An analysis of the impact of the daily minimum wage increase from R69 to R 105, resulting from recent farm labour unrest, revealed:

*   The basic labour bill is currently R800 million per year

*   The wage rate will increase labour costs from R7941 to R9815 per hectare

*   Added to the increases in electricity, petrol and water, the minimum wage increase will lead to cost inflation of 15%

*   This will result in a 60% decrease in profitability.

This will lead to wine farmers re-evaluating their cost structure, not just of labour, but also of all input costs, some already having announced that they will look at greater mechanisation.  Smaller farms may go bankrupt.  Medium and larger farms may merge, potentially leading to reduced employment. Empowerment projects, of which there are 52 in the wine industry, will be ‘seriously affected‘.   Employment may in future have to be linked to performance and productivity assessments.

Rico Basson, Executive Director of VinPro, concluded: ‘It is critical that a strategic framework be urgently formulated within which the wine industry, government and other role players can consider social, economic, and environmental factors for future sustainability: if not, many wine producers may abandon the industry’.

Chris von Ulmenstein, Whale Cottage Portfolio: www.whalecottage.com Twitter:@WhaleCottage

Minimum wage of hospitality staff increases by 7,4% from today, now close to R2500 per month!

The Minimum Wage for the Hospitality Sector (including hotels, guest houses and restaurants) has been increased by 7,4% by the Department of Labour from today, and is now R2240,60 per month for businesses with 10 or fewer employees, and R 2495,80 for businesses with more than 10 employees.

The increase is on 1 July every year, and the increase was higher than the 5,2% last year due to the higher Consumer Price Index at 6,4% currently.

TABLE 1:

Table 1:   Minimum wages for employers with 10 or less employees

Minimum rate for the period

Minimum rate for the period

1 July 2012 to 30 June 2013

1 July 2013 to 30 June 2014

Monthly

Weekly

Hourly

Monthly

Weekly

Hourly

R2240,60

R517,10

R11,49

Previous Minimum wage + CPI + 1%

TABLE 2:

Table 1:   Minimum wages for employers with more than 10 employees

Minimum rate for the period

Minimum rate for the period

1 July 2012 to 30 June 2013

1 July 2013 to 30 June 2014

Monthly

Weekly

Hourly

Monthly

Weekly

Hourly

R2495,80

R576,00

R12,80

Previous Minimum wage + CPI + 1%

Chris von Ulmenstein, Whale Cottage Portfolio: www.whalecottage.com Twitter: @WhaleCottage

Cape Town Tourism: should it defend ‘apartheid’ Cape Town?

I am not politically-inclined, do not belong to a political party, nor do I vote.  I am concerned however when I see the word ‘apartheid’ dragged into tourism communication, either to Cape Town’s ‘benefit’ (e.g. the bid for Cape Town as World Design Capital 2014) or detriment.  I was surprised to see an article on Cape Town Tourism’s website, defending a particularly nasty article in The Observer (a Sunday UK paper with about 1,2 million readers), with a photograph taken from The Promenade in Camps Bay, about Desmond Tutu’s birthday (Desmond Tutu’s dreams for Cape Town fade as informal apartheid grips the city’).

The Observer writer David Smith focused on Archbishop Tutu’s birthday last Friday, celebrated in St George’s Cathedral, the ‘fortress of resistance to racial apartheid‘, as his opening shot!  The article is a lengthy tome of attack against Cape Town, for being the ‘cancer of injustice, racial segregation and bitter division’, for its contrast of ‘opera houses’ (sic), ‘literary festivals’ (sic), ‘internet entrepreneurs’, ‘luxury mansions’, and ‘prosperous California-style wine estates’. It states that ‘millions (sic) of tourists’ arriving in the city will see the ‘other’ Cape Town, with shacks, violence, poverty, and ‘non-white’, resulting in a Cape Town that ‘remains an apartheid city in all but name’, contrary to what Tutu stands for, speaks the article on his behalf. The rest of the article justifies this statement, going back to Jan van Riebeeck as the real architect of segregation.  President Zuma is quoted as having said earlier this year that Cape Town is a “‘racist’ place with an ‘extremely apartheid system (sic)’.  The DA is labelled as ‘a front for the wealthy white elite’.  Andrew Boraine of the Cape Town Partnership has the closing word, quoting Tutu: ‘winning freedom is one thing – using it is twice as hard’. Heavy stuff indeed, and not for the faint-hearted to defend, especially not appropriate for the city’s tourism body to climb into the boxing ring for in our opinion, given only four incidental references to tourism:

*   Staff make up beds in 5-star hotel beds, and then come home to sleep on the floor

*   Staff cook the best meals for guests, and then live off a slice of bread

* ‘ Cape Town is largely for the benefit and entertainment of tourists’

*   Cape Town is the world’s top tourist destination

Had I been the guardian of the city of Cape Town, I would have:

*  Got Archbishop Tutu to speak for himself, and respond, in the unique and direct way only he can (he is not interviewed, and no quotes from him are mentioned, and neither is the Dalai Lama’s cancelled visit

*  Got our feisty Premier Helen Zille and Mayor Patricia de Lille to write the response, the latter’s appointment being an excellent counter to the article in itself.

*   pointed out that the hospitality industry has a Minimum Wage, currently R 2323 per month

*   countered that Cape Town has a population of 4 – 5 million residents that love living here, irrespective of their skin colour

*   corrected the information, in that there is only one opera house, and that one literary festival has taken place for the first time last month

*   highlighted that it is the tourists who have visited Cape Town and seen the reality of the haves and have-nots in our city, as one would see in every city in the world, even in London, and who have voted to give Cape Town the top tourism accolades.

*   highlighted the hospitality sector GM’s, sommeliers, restaurant managers, and other management staff, who have reached their professional positions, despite their past.

*  corrected the tourism arrival figure quoted

Instead, Cape Town Tourism CEO Mariette du Toit-Helmbold, mistakenly referring to the article being in The Guardian, wrote awkwardly about ‘the juxtaposition between Cape Town’s poor and wealthy communities’,and that the legacy of apartheid ‘is a disjointed physical landscape and economic society..‘, digging a terrible hole for herself and our city as she goes on to write that for many of Cape Town’s residents it is ‘not yet a great place to live’!  None of this has anything to do with tourism at all, and she is the wrong person to challenge a leading UK newspaper, and very clearly out of her depth in defending a past political system.   She writes that Cape Town will be ‘reimaging’ as a ‘more livable space for all‘.  She quotes the city’s World Design Capital 2014 bid, in ‘shedding light on sustainable design’. Mrs Helmbold does get to tourism in her reply, highlighting the size of the industry and its employment of 300000 staff (no source supplied). She writes that the City of Cape Town, with the tourism industry, has embraced ‘Responsible Tourism’, in that tourism ‘creates better places for people to live in, and better places to visit’.  She concludes that ‘tourism is the lifeline to livelihood”.

I wrote to Mrs Helmbold yesterday, asking her why she had responded, and if she had sent her reply to the newspaper. This was her response:“Cape Town Tourism, as industry association and destination marketing agency for Cape Town, will respond from time to time as appropriate on issues that could affect our industry and/or destination brand. It is important to illustrate the positive role and contribution of tourism to Cape Town’s economy and the commitment from tourism to contribute to making Cape Town a more livable city through embracing responsible tourism principles and practices. We have submitted our response directly to the Guardian (sic) and posted a copy on our industry website where we can direct industry queries about the article. The Guardian has not yet published our response”.

One hopes that Cape Town Tourism’s response is not published in The Observer, and that the tourism body will invite the journalist to Cape Town, to personally showcase the great opportunities in tourism being afforded to all its citizens.

POSTSCRIPT 15/10: We have received the following feedback from Lisa Harlow from the UK: Well I am a Times / Sunday Times reader and still agree with Nick! I wouldn’t worry too much about this report – quite typical of the Guardian and Observer. But more importantly was the fairly recent good coverage of South Africa in the Saturday Telegraph. However, recession still goes on in the UK, and this is more of a hurdle to overcome for tourism. Lets see how successful BA are with their extra Cape Town flights for the summer season…”

Chris von Ulmenstein, Whale Cottage Portfolio: www.whalecottage.com Twitter: @WhaleCottage

Hospitality Minimum Wage increases by 5,2%, over R2000 now!

The Minimum Wage for the Hospitality Sector has been increased by 5,2 % by the Department of Labour from tomorrow, and is now R2084,52 per month for businesses with 10 or fewer employees, and R2323,87 for businesses with more than 10 employees.  The increase is on 1 July every year, and the increase was reduced this year due to the lower Consumer Price Index.

The new Minimum Wages are as below:

TABLE 1:

Table 1:   Minimum wages for employers with 10 or less employees

Minimum rate for the period

Minimum rate for the period

1 July 2011 to 30 June 2012

1 July 2012 to 30 June 2013

Monthly

Weekly

Hourly

Monthly

Weekly

Hourly

R2084-52

R481-10

R10-70

Previous Minimum wage + CPI + 1%

TABLE 2:

Table 1:   Minimum wages for employers with more than 10 employees

Minimum rate for the period

Minimum rate for the period

1 July 2011 to 30 June 2012

1 July 2012 to 30 June 2013

Monthly

Weekly

Hourly

Monthly

Weekly

Hourly

R2323-87

R536-34

R11-92

Previous Minimum wage + CPI + 1%

Chris von Ulmenstein, Whale Cottage Portfolio: www.whalecottage.com Twitter:@WhaleCottage