Analysts at e-commerce company Picodi.com have compared minimum wage rates for 64 countries, including South Africa, and analysed whether the minimum rates are enough to ensure a minimum standard of living in a given country.
The study covered countries with a government-set minimum wage—a total of 64 countries in Europe, North and South America, Africa, Asia and Australia. Picodi compared the monthly minimum wage for full-time work in January 2022 with wages from January 2021. These rates come from official government websites, relevant ministries or committees.
These countries differ in the tax rate: in several countries, a person earning the minimum national wage is exempt from income tax and contributions (Hong Kong, Philippines, Nigeria), while in other countries the difference between gross and net income may be up to several dozen percent, the report’s authors said.
For this reason, the list only includes net amounts, i.e. money that the employee actually receives in cash or on his bank account.
Minimum wages around the world in 2022
South Africa places in the middle of the ranking at 36th. The current national minimum wage is R21.69 per hour, and the labour department has called for comment on a new minimum wage target for South Africa in 2022, at around R23 per hour. Depending on the number of hours (8-9) worked each day, a minimum hourly wage could attract between R3,400 and R3,900 per month.
Picodi puts the number at R3,555 per month, which it says will rise by 4.7% in 2022 to R3,722 net.
For the purpose of this study, Picodi created a contractual list of basic food products and compared the prices of these products with the minimum wage.
The list consists of 8 product groups: bread, milk, eggs, rice, cheese, meat, fruits and vegetables. It noted that while the list is very limited, in the amounts indicated, these products are sufficient to meet the minimum nutrient requirements of the average adult.
- Milk (10 litres) – R162
- Bread (10 loaves 500 g each) – R142
- Rice (1.5 kg) – R33
- Eggs (20 pcs.) – R50
- Cheese (1 kg) – R112
- Poultry and Beef (6 kg) – R550
- Fruits (6 kg) – R137
- Vegetables (8 kg) – R154
The value of basic food products at the beginning of 2022 is R1,340. Compared to the beginning of 2021, the price of the products has increased by 2.84%, the analysts noted.
Can you live off minimum wage in South Africa in 2022?
Basic food sufficient to meet the minimum nutrient requirements is worth 36% of the minimum wage. A year ago, these products were worth 36.7% of last year’s minimum wage. This means that the increase in the minimum wage has slightly exceeded the increase in prices, Picodi said.
“Since food preferences and perceptions of a comfortable life vary from region to region, and even from person to person, we decided to compare the prices of basic food products with the minimum wages to see how much of the minimum income a person has to spend on necessary products,” the authors said.
Basic Food Costs
The top countries in this ranking are the United Kingdom, Ireland and Australia: the ratio of basic products to the minimum wage ranges from 6.6% to 7.3%.
In this ranking, South Africa was placed 48th out of 64 countries with a result of 36%. Canada placed 7th (9.8%), the USA—13th (12.2%) and Malaysia—45th (35.3%).
The situation of minimum wage earners in Russia, Kazakhstan or India is not easy: in these countries, the minimum cost of basic food products consumes about half of their salary. On the other hand, in Nigeria, the minimum wage is not even enough for a modest basket of products.
The most recent Household Affordability Index by the Pietermaritzburg Economic Justice & Dignity group (PMBEJD), in December, showed that food prices increased slightly in December 2021, to R4,275.94 for a basket.
The civil society initiative’s data showed that year-on-year, however, basket prices have increased by 6.8%, outstripping headline inflation. The same basket in December 2020 was R4,002.42, meaning households are paying R273.52 more than a year ago.
PMBEJD’s basket comprises 44 core food items most frequently purchased by lower-income households, who make up most households in the country.
The group said that its calculations for a worker employed full-time at the national minimum wage rate (R21.69 per hour or R3,644 per month), shows that after transport and electricity have been secured (at an average total of R2,076: R1,344 to transport and R731,50 to electricity), a workers family is only left with approximately R1,568.