IDEAS home Printed from https://ideas.repec.org/a/ags/agreko/10131.html
   My bibliography  Save this article

Impact of the Sectoral Determination for Farm Workers on the South African Sugar Industry: Case Study of the KwaZulu-Natal North and South Coasts

Author

Listed:
  • Murray, Justin
  • van Walbeek, Corne

Abstract

A survey of 103 sugarcane farmers on the KwaZulu-Natal coast was conducted in order to analyse the impact of the Sectoral Determination for Farm Workers (2002) on South African agriculture. The sample was separated into a high wage paying North Coast and lower wage paying South Coast. Typically farmers were unable to distinguish between the impact of the Sectoral Determination and other labour laws. Results indicate that the impact of the legislation is similar in each region. No respondents reported mass retrenchment, but job shedding is disguised by not replacing workers (especially unskilled workers) that leave the farm. A sizeable number of growers (17 per cent on the South Coast and 44 per cent on the North Coast) have reduced the working week to 27 hours (or 36 hours in the Felixton Mill Group Area) enabling them to pay wages on an hourly, rather than a weekly basis. This strategy reduces the effective wage. About 40 per cent of growers have reduced the in-kind benefits to their workers. About half of respondents indicated that they are likely to increase their use of seasonal and contract labour in future. Although a majority of respondents indicated that they considered mechanisation of the harvesting process, cost and topographical factors currently does not make this a serious alternative to manual harvesting. However, because of increased wage costs and the relatively strong currency in recent years, chemical weed control has become an attractive alternative to manual weed control.

Suggested Citation

  • Murray, Justin & van Walbeek, Corne, 2007. "Impact of the Sectoral Determination for Farm Workers on the South African Sugar Industry: Case Study of the KwaZulu-Natal North and South Coasts," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 46(1), pages 1-19, March.
  • Handle: RePEc:ags:agreko:10131
    DOI: 10.22004/ag.econ.10131
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/10131/files/46010116.pdf
    Download Restriction: no

    File URL: https://libkey.io/10.22004/ag.econ.10131?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Lawrence Katz & Alan Krueger, 1992. "The Effect of the Minimum Wage on the Fast Food Industry," Working Papers 678, Princeton University, Department of Economics, Industrial Relations Section..
    2. Deepak Lal, 1995. "The Minimum Wage," UCLA Economics Working Papers 723, UCLA Department of Economics.
    3. Lawrence F. Katz & Alan B. Krueger, 1992. "The Effect of the Minimum Wage on the Fast-Food Industry," ILR Review, Cornell University, ILR School, vol. 46(1), pages 6-21, October.
    4. Robin P. Cubitt & Shaun P. Hargreaves Heap, 1999. "Minimum Wage Legislation, Investment and Human Capital," Scottish Journal of Political Economy, Scottish Economic Society, vol. 46(2), pages 135-157, May.
    5. Alida Castillo-Freeman & Richard B. Freeman, 1992. "When the Minimum Wage Really Bites: The Effect of the U.S.-Level Minimum on Puerto Rico," NBER Chapters, in: Immigration and the Work Force: Economic Consequences for the United States and Source Areas, pages 177-212, National Bureau of Economic Research, Inc.
    6. Conradie, Beatrice, 2005. "Wages and wage elasticities for wine and table grapes in South Africa," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 44(1), pages 1-19, March.
    7. Theodore P. Lianos, 1972. "Impact of Minimum Wages Upon the Level and Composition of Agricultural Employment," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 54(3), pages 477-484.
    8. Dickens, Richard & Machin, Stephen & Manning, Alan, 1999. "The Effects of Minimum Wages on Employment: Theory and Evidence from Britain," Journal of Labor Economics, University of Chicago Press, vol. 17(1), pages 1-22, January.
    9. E.J. Goedecke & G.F. Ortmann, 1993. "Transaction Costs and Labour Contracting in the South African Forestry Industry," South African Journal of Economics, Economic Society of South Africa, vol. 61(1), pages 44-54, March.
    10. Roumasset, James & Uy, Marilou, 1980. "Piece rates, time rates, and teams : Explaining patterns in the employment relation," Journal of Economic Behavior & Organization, Elsevier, vol. 1(4), pages 343-360, December.
    11. Bruce Gardner, 1972. "Minimum Wages and the Farm Labor Market," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 54(3), pages 473-476.
    12. repec:fth:prinin:298 is not listed on IDEAS
    13. repec:bla:scotjp:v:46:y:1999:i:2:p:135-57 is not listed on IDEAS
    14. Newman, R.A. & Ortmann, Gerald F. & Lyne, Michael C., 1997. "Farm Labour Remuneration, Labour Legislation And Commercial Farmers' Perceptions In Kwazulu-Natal," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 36(1), pages 1-13, March.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Haroon Bhorat & Karmen Naidoo & Derek Yu, 2014. "Trade Unions In An Emerging Economy: The Case Of South Africa," Working Papers 201402, University of Cape Town, Development Policy Research Unit.
    2. Uma Rani, 2017. "Minimum Wage Policies and Their Effects in Developing Countries: A Comparative Perspective," The Indian Journal of Labour Economics, Springer;The Indian Society of Labour Economics (ISLE), vol. 60(1), pages 33-55, March.
    3. Haroon Bhorat & Ravi Kanbur & Natasha Mayet, 2013. "The impact of sectoral minimum wage laws on employment, wages, and hours of work in South Africa," IZA Journal of Labor & Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 2(1), pages 1-27, December.
    4. Haroon Bhorat & Tara Caetano & Benjamin Jourdan & Ravi Kanbur & Christopher Rooney & Benjamin Stanwix & Ingrid Woolard, 2016. "Investigating the Feasibility of a National Minimum Wage for South Africa," Working Papers 201601, University of Cape Town, Development Policy Research Unit.
    5. Haroon Bhorat & Ravi Kanbur & Benjamin Stanwix, 2014. "Estimating the Impact of Minimum Wages on Employment, Wages, and Non-Wage Benefits: The Case of Agriculture in South Africa," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 96(5), pages 1402-1419.
    6. Marlies Piek & Dieter von Fintel, 2020. "Sectoral minimum wages in South Africa: Disemployment by firm size and trade exposure," Development Southern Africa, Taylor & Francis Journals, vol. 37(3), pages 462-482, May.
    7. Mr. Christopher S Adam & Mr. Edward F Buffie, 2020. "The Minimum Wage Puzzle in Less Developed Countries: Reconciling Theory and Evidence," IMF Working Papers 2020/023, International Monetary Fund.
    8. Bhorat, Haroon & Naidoo, Karmen & Yu, Derek, 2014. "Trade unions in an emerging economy: The case of South Africa," WIDER Working Paper Series 055, World Institute for Development Economic Research (UNU-WIDER).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Haroon Bhorat & Tara Caetano & Benjamin Jourdan & Ravi Kanbur & Christopher Rooney & Benjamin Stanwix & Ingrid Woolard, 2016. "Investigating the Feasibility of a National Minimum Wage for South Africa," Working Papers 201601, University of Cape Town, Development Policy Research Unit.
    2. Arindrajit Dube & Attila S. Lindner, 2024. "Minimum Wages in the 21st Century," NBER Working Papers 32878, National Bureau of Economic Research, Inc.
    3. Meghan J. Millea & Jon P. Rezek & Brian Shoup & Joshua Pitts, 2017. "Minimum Wages in a Segmented Labor Market: Evidence from South Africa," Journal of Labor Research, Springer, vol. 38(3), pages 335-359, September.
    4. Sparrow, G.N. & Ortmann, Gerald F. & Lyne, Michael C. & Darroch, Mark A.G., 2008. "Determinants of the demand for regular farm labour in South Africa, 1960-2002," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 47(1), pages 1-24, March.
    5. Dickens, Richard & Machin, Stephen & Manning, Alan, 1998. "Estimating the effect of minimum wages on employment from the distribution of wages: A critical view," Labour Economics, Elsevier, vol. 5(2), pages 109-134, June.
    6. Eva Lajtkepová, 2010. "Minimum Wage and Labour Market [Minimální mzda a trh práce]," Acta Oeconomica Pragensia, Prague University of Economics and Business, vol. 2010(1), pages 3-20.
    7. Mayneris, Florian & Poncet, Sandra & Zhang, Tao, 2018. "Improving or disappearing: Firm-level adjustments to minimum wages in China," Journal of Development Economics, Elsevier, vol. 135(C), pages 20-42.
    8. János Köllö, 2010. "Hungary: The Consequences of Doubling the Minimum Wage," Chapters, in: Daniel Vaughan-Whitehead (ed.), The Minimum Wage Revisited in the Enlarged EU, chapter 8, Edward Elgar Publishing.
    9. M. Kemal Biçerli & Merve Kocaman, 2019. "The Impact Of Minimum Wage On Unemployment, Prices, And Growth: A Multivariate Analysis For Turkey," Economic Annals, Faculty of Economics and Business, University of Belgrade, vol. 64(221), pages 65-84, April – J.
    10. Machin, Stephen & Manning, Alan & Rahman, Lupin, 2002. "Where the minimum wage bites hard: the introduction of the UK national minimum wage to a low wage sector," LSE Research Online Documents on Economics 20070, London School of Economics and Political Science, LSE Library.
    11. Holmlund, Bertil, 2014. "What do labor market institutions do?," Labour Economics, Elsevier, vol. 30(C), pages 62-69.
    12. Marlies Piek & Dieter von Fintel, 2020. "Sectoral minimum wages in South Africa: Disemployment by firm size and trade exposure," Development Southern Africa, Taylor & Francis Journals, vol. 37(3), pages 462-482, May.
    13. John Douglas Skåtun & Ioannis Theodossiou, 2003. "Contracts, the Spot Market Wage and Unemployment Benefits," Metroeconomica, Wiley Blackwell, vol. 54(4), pages 474-498, November.
    14. Haroon Bhorat & Ravi Kanbur & Natasha Mayet, 2013. "The impact of sectoral minimum wage laws on employment, wages, and hours of work in South Africa," IZA Journal of Labor & Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 2(1), pages 1-27, December.
    15. Alan B. Krueger, 1994. "The Effect of the Minimum Wage When It Really Bites: A Reexamination of the Evidence from Puerto Rico," Working Papers 709, Princeton University, Department of Economics, Industrial Relations Section..
    16. Daniel Aaronson & Eric French, 2007. "Product Market Evidence on the Employment Effects of the Minimum Wage," Journal of Labor Economics, University of Chicago Press, vol. 25(1), pages 167-200.
    17. Carla Canelas, 2014. "Minimum Wage and Informality in Ecuador," WIDER Working Paper Series wp-2014-006, World Institute for Development Economic Research (UNU-WIDER).
    18. Orbeta, Aniceto Jr. C. & Lanzona, Leonardo & Paqueo, Vicente B., 2016. "The Impact of Legal Minimum Wages on Employment, Income, and Poverty Incidence in the Philippines," Discussion Papers DP 2016-54, Philippine Institute for Development Studies.
    19. Danz, David & Engelmann, Dirk & Kübler, Dorothea, 2022. "Do legal standards affect ethical concerns of consumers?," European Economic Review, Elsevier, vol. 144(C).
    20. Maite Blázquez Cuesta & Raquel Llorente Heras & Julián Moral Carcedo, 2011. "Minimum Wage And Youth Employment Rates, 2000-2008," Revista de Economia Aplicada, Universidad de Zaragoza, Departamento de Estructura Economica y Economia Publica, vol. 19(2), pages 35-57, Autumn.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:agreko:10131. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/aeasaea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.