The Impact of Minimum Wages in the Environment and Culture Sector of the Expanded Public Works Programme

Abstract

The Public Works Programme initiated during the Great Depression in the United States was known for its ability to stimulate economic activity through employment creation. Its aim of alleviating poverty and reducing inequality finds an echo in one of the primary objectives of South Africa’s Expanded Public Works Programme (EPWP). This programme focuses on reducing unemployment through work-based programmes, in that way providing income relief to many households through job creation. The very high levels of unemployment and the associated poverty and inequality are considered to be among some of the most daunting challenges that the South African economy faces. The environment and culture sector has experienced many challenges relating to wage determination and wage-setting behaviour. The aim of this article is to investigate the impact of setting minimum wages in the environment and culture sector as an appropriate wage strategy intervention policy under the EPWP. The EPWP is a nationwide programme comprising projects that are aimed at job development. After analysing data from over 3,500 individual projects, the author found that there was a negative relationship between wage-setting behaviour and job creation as far as many individuals were concerned, especially women and youths. The author established that investment in skills development and training had a positive impact on outcomes in the Environment and Culture Sector of the EPWP.