Minimum wage on the move

The minimum wages in South Africa are due to increase again on 1 March 2021.  This comes after the last significant increase a year ago, in 2020.  Although there has been an across-the-board increase in minimum wages, irrespective of industry, one noticeable change is that farmworkers are now on par with the national minimum wage.

Minister of Labour and Employment, Thulas Nxesi, announced last week that the National Minimum Wage (NMW) Commission decided that the minimum wage should increase from R20.76 to R21.69 per hour.  This decision took inflation, the cost of living, and the country’s gross domestic product into account. The NMW Commission also received input from experts, employers, organisations, trade unions, and government before coming to a decision on the increase amount as well as how the different sectors would be affected.

For the first time, farmworkers will receive the same minimum wage as the national amount, at an increase of 16.11% compared to last year. Click here to see the full breakdown of updated minimum wages.

However, widespread discontentment with the minimum wage continues, as monthly salaries at these minimum amounts amount to less than a living wage in 2021 and domestic workers and public work employees still fall below the national minimum wage.

Refilwe Moloto, a presenter on Cape Talk, expressed her concern about these disparities during her conversation with Jan Truter, Director of LabourWise.  According to Truter, South African households need between R3 500 and R4 000 per month just for food, without the costs of clothing, transportation, housing, schooling and other necessary expenses.  The Household Affordability Index calculates that the cost of basic food items, household and personal hygiene products come to about R3 000.  This is simply unattainable for many South African employees working at the minimum wage.  For example, a Public Works Employee working 45 hours per week would only earn a salary of R2 325 per month.

This leads to questions about whether the minimum wage increase is enough.  Is this increase sufficient if many South Africans who have dependents still cannot afford nutritious food for their families, let alone other life expenses?  Truter says that there is a delicate balance involved.

On the one hand, South African families should ideally be receiving an income which is a living wage.  The minimum wage could control this.

However, consideration must be given to the needs of small businesses and individuals who employ people such as domestic workers.

Truter says that small businesses, especially small farms, simply cannot afford to pay all of their workers a living wage.  This is due to the sheer volume of workers required to operate a farm and the relatively small revenue that a small farm would generate.  He also recognises that increasing the minimum wage for domestic workers to a living wage would likely put many domestic workers out of a job, since those employing domestic workers would not want to pay so much.

A job with a low wage is better than no job at all, says Truter.

References:

• 9 February 2021. Department of Employment and Labour South Africa. Employment and Labour Minister TW Nxesi announces minimum wage increases. http://www.labour.gov.za/employment-and-labour-minister-tw-nxesi-announces-minimum-wage-increases
• 10 February 2021. Cebelihle Bhengu, Times Live. EXPLAINED | The national minimum wage is set to increase in March — here’s what it can get you. https://www.timeslive.co.za/news/south-africa/2021-02-10-explained-the-national-minimum-wage-is-set-to-increase-in-march-heres-what-it-can-get-you/
• 10 February 2021. Kabous le Roux, Cape Talk. New minimum wages (R3700 to R4230): ‘Not enough for a household to survive on’. https://www.capetalk.co.za/articles/408374/new-minimum-wages-r3700-to-r4230-not-enough-for-a-household-to-survive-on
• 11 February 2021. Connold and Associates. MINIMUM WAGE REGULATIONS 2021. https://www.connold.co.za/minimum-wage-regulations-2021/?utm_source=mailpoet&utm_medium=email&utm_campaign=newsletter-post-title_2

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