The latest job data from Statistics South Africa has painted a grim picture for employment prospects in the country.
The Quarterly Labour Force Survey results for the second quarter of the year showed a massive jump in the South African unemployment rate to 29%, the highest point in 16 years.
The big leap was as a result of an increase of 455,000 more people who are unemployed versus an increase of 21,000 people who found employment during the quarter, the stats body said.
This means that of the 476,000 new people entering the workforce in South Africa in the second quarter, only 4% managed to find a job.
Across the different sectors in South Africa, private households were hardest hit by the poor second-quarter figures where 49,000 jobs were lost.
Households have come under increasing pressure over the last few years, burdened by higher taxes, a higher cost of living and the fallout of many of South Africa’s other ills (low growth, political uncertainty).
This has invariably forced many households to cut back on spending where they can, which has had a direct impact on domestic jobs.
This is highlighted further by Stats SA’s data on job types, where the group reports a second quarterly decline in domestic worker positions, where 19,000 domestic workers lost their jobs in the second quarter.
Added to the losses seen in the first quarter of the year (15,000 jobs lost), more than 34,000 domestic workers have now been put out of work in the first half of the year alone.
Domestic worker pay
The decline in domestic worker jobs over this period is significant because it lines up with the introduction of the new National Minimum Wage (NMW) which came into effect on 1 January 2019.
While the NMW is set at R20 per hour, domestic workers were one of three category exemptions, where the minimum was set at R15 per hour.
The NWM does not trump any minimum wages established by sectoral determinations, so the R16.03 per hour set for domestic workers working less than 27 hours per week in area A zones takes precedence over the national minimum wage.
More on the minimum wage for domestic workers can be found here.
The reality for domestic workers in South Africa is far worse, however, with data from the Household Affordability Index by the Pietermaritzburg Economic Justice & Dignity Group, showing that domestic workers are some of the most vulnerable workers in the country, even with the introduction of the National Minimum Wage.
For domestic workers, the NMW rate is R15 per hour – but the wage laws allow for employers to apply for exemptions, which could reduce this by 10% to R13.50 an hour.
According to the group’s research, the cost of feeding a family of four in South Africa ranges from R1,276 per month for core foods, to R2,474 per month for a basic nutritionally complete basket of food.
With bigger families, which is often commonplace in South Africa, these prices can increase to as much as R4,236 per month for a family of seven.
Under these conditions, a domestic worker would have to earn at minimum R27 per hour to meet these requirements.
Households cutting back
Instead of paying more, however, South African households are looking where they can cut back on their monthly spending – and domestic workers are one of the services most likely to get the chop.
A recent household survey conducted by financial group Old Mutual found that 15% of South African households said they would cut back on domestic worker services to help save costs each month.
While the figure is low compared to other ‘luxury’ items and services that people say they would cut out, 79% of all households surveyed said they do not have a domestic worker, or have already cut this service.
Old Mutual’s survey showed an average 25% increase in households suffering major stress due to money issues in 2018/19, with lower income households under the most pressure.
Middle to upper-income families also showed higher levels of financial stress as well, the group said.
42% of all respondents said they struggle to make ends meet each month, while 73% said they are constantly worried about having enough money.