'Ramaphosa has it wrong' New minimum wage is lower than current wage A new proposed minimum wage of R3 500 for South Africa actually calculates to lower than the current minimum wage rate. A national minimum wage proposal of R3 500 – if divided by the average number of people in a typical South African household – is below the current poverty wage. This is according to the Pietermaritzburg Agency for Community Social Action (Pacsa) – non-profit organisation which campaigns for social justice and human rights.
Julie Smith, researcher at Pacsa, told Fin24 that among black households in South Africa a wage typically supports four people per household.
“So when you talk about a national minimum wage you have to look at how that income is dispersed within a household. The average number of people per household in South Africa that one wage supports is 3.9 people.
“A minimum wage of R3 500 divided by four people is therefore R875, while the current poverty line is R1 077.”
Deputy President Cyril Ramaphosa on Sunday announced that an advisory panel on a national minimum wage recommended that it be set at R3 500. The panel suggested that the amount be phased in over a period of two or three years.
According to the panel the amount was higher than what 50% of South Africans are currently earning.
Smith, however, points out that although Ramaphosa acknowledged the mooted amount of R3 500 is not a living wage, but it is also not above the poverty line.
“He made it sound like it''s above the poverty wage and it''s actually not.”
Pacsa tracks to figures, Smith said – the amount households need to buy essentials each month and the amount households need to buy basic, but proper nutritional items.
In October 2016, the cost of the Pacsa minimum nutritional food basked for a family of four is R2 394.32
“The low proposed National Minimum Wage of R3 500 per month is not enough for workers to support their families, nor does it address our historical racial wage structure. We have analysed the proposed figure from two angles: South Africa''s latest statistical data disaggregated along racial lines and through the cost of goods and services required for a worker to support his/her family. In both cases, we find that R3 500 is far too low,” Smith said.
“Basically food is expensive,” Smith said, “but so are transport and electricity. So if you look at R3 500 – when you disperse it through the household – it''s below the poverty wage and the principle of a national minimum wage is to try and lift people out of poverty,” Smith said.
Pacsa argued that a national minimum wage for South Africans should be set at R8 000 at least if households are to have the possibility of leading a basic, dignified lifestyle.
“When you start adding up all of the expenses a household incurs the cost of living is R6 522 and that excludes debt repayments and other things. We don''t necessarily say the income needs to be at R8 000. We can look at other things, such as free basic services. But households should have that amount at their disposal – either in rand value or in more affordable services,” Smith opined.
“Wages are typically increased per the Consumer Price Index - the headline inflation figure. Low-income households tend to experience inflation at a higher level than reflected in headline inflation and this will continue to trap working families in poverty. Unless the national minimum wage is set at a level which takes us out of this low-wage trajectory, it might be better not to have a national minimum wage of R3 500 because it will put back the struggle of workers for decades,” Smith added.
Meanwhile Deputy President Cyril Ramaphosa has been challenged to live on R3 500 per month to see how little the new proposed National Minimum Wage (NMW) is.
The Gauteng Province branch of the Young Communist League of SA “rejects outright the proposed minimum wage”, Gauteng provincial secretary Alex Mdakane said in a statement on Sunday.
“This is in fact an insult to the more than 47% of South Africans who wake up every morning to be exploited for a pittance of just below R3 500,” said Mdakane.
Mdakane challenged Ramaphosa in his role at Nedlac “to live on R3 500 at least for a week to actually experience the ''impact'' a R3 500 wage per month has on an average employee.”
FIN24