South Africa’s minimum wage vs the world
South Africa’s minimum wage is expected to be updated next year in March 2023, considering the high cost of living amid rising global inflation and hiked interest rates.
The previous increase was above inflationary levels; however, since then, inflation has skyrocketed – vastly changing market conditions.
South Africa differs from some countries abroad in that it actually has a national minimum wage. According to Cliffe Dekker Hofmeyr, some places such as Austria, Belgium, Denmark and Finland do not have such.
The minimum wage can be determined for a country through collective bargaining, or sometimes it can be based on a person’s age, such as in the UK or Ireland. The wage can also differ across provincial or regional boundaries, like in China and Japan.
Domestically, however, there is a legal requirement that employers pay workers the national minimum wage, which is applicable across the board.
The minimum wage in South Africa has been a contentious issue in light of the debilitating unemployment faced by everyday South Africans and the fact that the majority of the population is impoverished.
Since its inception, the wage has been amended consistently in 2019, 2021 and again this year, where it was adjusted to R23.19 per hour, roughly a 6.9% increase from the year before.
The prior increase was higher than the rate of inflation; however, since that time, the rate of inflation has surged, drastically altering market conditions.
The average worker who receives the hourly minimum wage will take home R3,710 per month (eight hours a day, 20 days a month).
- 2019 – R20.00 per hour
- 2020 – R20.76 per hour
- 2021 – R21.69 per hour
- 2022 – R23.19 per hour
This move by the government was in line with a global trend to improve the lowest allowable salaries.
Legal firm Cliffe Dekker Hofmeyr said that the UK is expected to again raise its wage in 2023, while Poland is having two increases throughout next year, and Malaysia will also reconsider its minimum wage at the start of 2023 in January.
Cliffe Dekker Hofmeyr reported the following jurisdictions also increasing their minimum wage:
The following jurisdictions have also increased (or are in the process of increasing) their national minimum wage:
(Note: Countries that based their minimum wage off a monthly outcome were calculated backwards to get the hourly rate; these are, however, mere calculations. For the sake of calculations, a normal working day was 8 hours, while an employee was estimated to work 20 days a month. All rand conversions were taken at R17.26/$, R17.82/€ and R20.51/£.)
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