The agreement on the national minimum wage (NMW) entered into by Nedlac's social partners - government, business, trade unions and community-based organisations - has brought South Africa's wage structure and levels into sharp focus.

Research has established that around 6.6-million working people in our country get paid less than R20 an hour. This translates to about R3500 a month. Many of these workers are in the taxi, domestic, private security, hospitality, forestry, agriculture, wholesale and retail, meat trade, fishing, textile, clothing, hairdressing, furniture and cleaning industries. In some industries, some of the workers earn R6 an hour.

This means that we have at least 6.6-million South Africans who are regarded as the "working poor". The low wages that these workers earn is a clear demonstration of income inequality in South Africa. This situation is unacceptable.

The introduction of a NMW at R20 an hour from no later than May 1 2018 will make a real difference in the lives of millions of South African workers.

The agreement, which is the result of nearly two years of negotiations between the social partners, strikes a balance between the need to improve the wages of the lowest paid workers and the need to create jobs at a far greater pace.

The social partners agreed that the NMW needed to be set at a level that makes a meaningful difference in people's lives, but that it should not lead to job losses and the closure of businesses.

They were clear that the NMW is not the same as a living wage, which is broadly understood as the amount needed for a household to achieve a decent standard of living, but that the NMW is a significant starting point towards the achievement of the goal of a living wage for all.

The NMW will not only have a positive effect on individual workers and their families; it is likely to have broader economic and social benefits. International research shows that when set at an appropriate level, a national minimum wage can help stimulate the economy while reducing poverty and inequality. This is particularly important in a country like South Africa, which has a huge wage gap and widespread poverty.

By putting more money into the hands of workers, a meaningful minimum wage can help increase demand, stimulate economic activity and create more jobs.

It has been agreed that the level of the NMW will be regularly reviewed to determine its effect on jobs, poverty, and the economy more broadly. The NMW will be adjusted annually, taking into account these and other factors, such as the cost of living.

Companies that are genuinely unable to afford to pay the minimum wage may apply for an exemption for up to a year, giving them time to adjust.

Government is also looking at a range of measures that could assist companies in vulnerable sectors and small enterprises.

The NMW will cover all workers in the country except unpaid volunteers and state security agents. The minimum level for domestic workers will initially be set at 75% of the NMW and for farm workers at 90%. It is expected that over the course of two years, these will be adjusted to reach the NMW level.

The social partners have agreed to explore other measures to close the gap between the highest paid and the lowest paid. This work will take place alongside discussions on a comprehensive social security system that addresses the needs of the most vulnerable in society.

For nearly two years, the representatives of business and labour, government and communities, have been locked in negotiations on the national minimum wage. The agreements reached last week are therefore a remarkable achievement.

However, the real impact of this work will only really be felt some time during the first half of next year, when the lives of millions of South African workers will be fundamentally changed for the better.

Ramaphosa is deputy president