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Wages and wage elasticities for wine and table grapes in South Africa

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  • Beatrice Conradie

    ()
    (School of Economics, University of Cape Town)

Abstract

A survey of 190 wine and table grape farmers in the Western Cape puts the average wage for farm labour at R928 per month in 2003 and R1123 per month in 2004. Output per worker has doubled since 1983. On farms with grape harvesters, labour is 30 per cent more productive (48 ton/worker) than on farms where wine grapes are picked by hand (37 ton/worker). At 9.75 tons per worker, table grapes are four times as labour-intensive as wine grapes. Resident men dominate the workforce on wine farms, while the resident female workforce is 20 per cent larger than the resident male workforce on table grape farms. Seasonal workers contribute a third of labour in table grapes, and brokers less than ten per cent in either case. In a single-equation short-run Hicksian demand function, wage, output, capital levels and mechanisation intensities are highly significant determinants of employment. Higher wages decrease employment and larger output increases employment. More mechanisation, measured by the number of tractors used to produce a ton of fruit, raises labour intensity too. Grape harvesters could not be shown to reduce jobs. The ten per cent rise in the minimum wage planned for March 2005 could reduce employment by 3.3 per cent in the wine industry and 5.9 per cent in the table grape industry, but it is more likely that the wage increase will be offset against fewer benefits. The average expected impact is about the same as for all agriculture and manufacturing as a whole.

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Bibliographic Info

Paper provided by Southern Africa Labour and Development Research Unit, University of Cape Town in its series SALDRU/CSSR Working Papers with number 090.

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Date of creation: 2004
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Handle: RePEc:ldr:cssrwp:090

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  1. Richard Dickens & Stephen Machin & Alan Manning & David Metcalf & Jonathan Wadsworth & S Woodland, 1994. "The Effect of Minimum Wages on UK Agriculture," CEP Discussion Papers dp0204, Centre for Economic Performance, LSE.
  2. 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), March.
  3. A. J. Errington & L. Harrison Mayfield & Y. Khatri & R. Townsend, 1997. "Estimating the price elasticity of demand for family and hired farm labour in England and Wales," Applied Economics, Taylor & Francis Journals, vol. 29(12), pages 1561-1574.
  4. Murray Leibbrandt & Laura Poswell & Pranushka & Matthew Welch & Ingrid Woolard, 2004. "Measuring recent changes in South African inequality and poverty using 1996 and 2001 census data," SALDRU/CSSR Working Papers 084, Southern Africa Labour and Development Research Unit, University of Cape Town.
  5. JW Fedderke & Martine Mariotti, 2002. "Changing Labour Market Conditions In South Africa," South African Journal of Economics, Economic Society of South Africa, vol. 70(5), pages 830-864, 06.
  6. Christopher J. O'Donnell & C. Richard Shumway & V. Eldon Ball, 1999. "Input Demands and Inefficiency in U.S. Agriculture," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 81(4), pages 865-880.
  7. Stephan Klasen & Ingrid Woolard, 1999. "Levels, trends and consistency of employment and unemployment figures in South Africa," Development Southern Africa, Taylor & Francis Journals, vol. 16(1), pages 3-35.
  8. Balcombe, Kelvin George & Bailey, Alastair & Morrison, Jamie & Rapsomanikis, George & Thirtle, Colin G., 2000. "Stochastic biases in technical change in South African agriculture," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 39(4), December.
  9. Martine Visser & Frikkie Booysen, 2004. "Determinants of the choice of health care facility utilised by individuals in HIV/AIDS-affected households in the Free State province of South Africa," SALDRU/CSSR Working Papers 087, Southern Africa Labour and Development Research Unit, University of Cape Town.
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Cited by:
  1. Haroon Bhorat & Ravi Kanbur & Natasha Mayet, 2012. "The Impact of Sectoral Minimum Wage Laws on Employment, Wages and Hours of Work in South Africa," Working Papers 12154, University of Cape Town, Development Policy Research Unit.
  2. Bhorat, Haroon & Naidoo, Karmen & Yu, Derek, 2014. "Trade unions in an emerging economy: The case of South Africa," Working Paper Series UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
  3. 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), March.
  4. 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), March.
  5. Martin Wittenberg, 2004. "The mystery of South Africa's ghost workers in 1996: measurement and mismeasurement in the manufacturing census, population census and October Household Surveys," SALDRU/CSSR Working Papers 095, Southern Africa Labour and Development Research Unit, University of Cape Town.
  6. Thirtle, Colin G. & Piesse, Jenifer & Gouse, Marnus, 2005. "Agricultural technology, productivity and employment: Policies for poverty reduction," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 44(1), March.

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