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Here’s what South African businesses think they should be paying as a ‘living wage’


The national minimum wage has remained a contentious issue in South Africa, with the legislation still not formally introduced despite a 1 May deadline.

One of the key issues surrounding minimum wage is how different groups view the ‘minimum’, with a number of analysts indicating that the mandated R20 an hour will lead to job losses, while others have argued that it this amount is nowhere near high enough.

According to PwC’s latest Executive Director’s report, this conflation of the concepts of a ‘minimum wage’ and a ‘living wage’ has also led to disputes over the course of this year with organised labour.

It explained that a ‘minimum wage’ is a legislated absolute minimum pay level, whereas a ‘living wage’ is an aspirational minimum pay level for full-time staff that permits a frugal but dignified life.

“There is no definitive study available to establish a South African living wage level, but the general view among reward professionals and large corporates is that this is around R10,000 to R12,000 per month,” it said.

“We note that several large corporates have made particular efforts to raise the pay for their most junior workers to around this level, and that some now actually disclose this in their remuneration reports.”

It added that it discussions on the contribution of fair pay to addressing the issues of inequality, unemployment and poverty were clearly gaining momentum in the country.

“The national focus on these matters and the clear focus on business growth and human capital development is evident in statements by President Ramaphosa and other government leaders, the King IV requirement to consider fair and responsible remuneration in the context of the overall remuneration of the organisation, which is now being seen in some of the December 2017 year-end company reports, and the almost daily mention of the matter in the national discourse,” it said.

“Our opinion remains that focusing on the financial wellness of junior workers, and aspiring to pay at least a living wage is a sound strategy for businesses in South Africa,” it said.

“In addition, partnering with government and other social partners to invest in education and skills development provides a longer-term solution to addressing inequality and bringing about economically sustainable prosperity”.

What South Africans think the minimum wage should be

In May, the Human Sciences Research Council (HSRC) published the findings of its survey on wage inequality in South Africa.

One of the major focuses of the survey explored South Africans’ perceptions regarding appropriate legal interventions for both South Africa’s highest and lowest earners.

This includes the proposal of a ‘new’ minimum wage, as well as a limit on how much executives and other top earners should be paid.

The results showed that South Africans believe that a mean figure of R6,953 per month is an appropriate minimum amount, substantially more than the R3,500 for a 40-hour week proposed in the National Minimum Wage Bill.

The HSRC also noted that there were clear differences between sub-populations, with figures ranging from rural farm dwellers believing R5,707 to be adequate, in comparison to R9,678 for students and R10,121 among adolescents.

Research carried out by the Pietermaritzburg Agency for Community Social Action (Pacsa) has found that R8,000 a month would be the ideal minimum wage where workers would be able to afford a nutritional basked of food each month, while being able to pay for basic necessities and live a dignified life.



Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER

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