South Africa’s minimum wage vs the world – with another big hike hitting in March

 ·25 Feb 2024

South Africa’s National Minimum Wage (NWM) for the 2023/24 financial year was quite muted compared to 67 other countries – and the overall wage still ranks low when considering affordability.

However, the wage will increase by another 8.5% in 2024/25, which will take it even higher.

Picodi South Africa’s analyst team checked how the minimum wage changed in 67 countries – including South Africa – and how the cost of a “survival basket” compares to the minimum wage.

In the report, the analysts used net wages, which employees take home. They found such a comparison is more fair, as the difference between gross and net pay, depending on the country, can be as high as 30%.

The study compared the monthly minimum wages for full-time work effective January 2024 with those from the beginning of the last year. These rates come from official government websites, relevant ministries or committees as of 8 January 2024.

In most countries in the ranking (58 out of 67), the minimum wage has changed compared to the wage in January last year (2022/23).

The lowest rises were given to workers in France (3.4%), Germany (2.8%), and Thailand (2.5%). At the same time, in countries such as Spain, Malaysia or Vietnam, governments have frozen the minimum wage or have not yet decided on the increase.

The highest increase in the minimum wage can be found in Argentina (+138%) and Türkiye (+100%), although the huge inflation in those countries forced this.

South Africa ranked 44th in 2023: the minimum net wage was R4,353 last year, which is 9.4% more than in 2022 (R3,979 net). Interestingly, South Africa’s minimum net wage over the past six years has increased by 27%.

Effective 1 March 2024, the minimum wage will increase from R25.42 per hour to R27.58. Based on Picodi’s data, this should take the minimum wage to around R4,700 a month.

Financial yearMonthly NMW net amount% Change
2018/19R3 425
2019/20R3 4250.0%
2020/21R3 555+3.8%
2021/22R3 722+4.7%
2022/23R3 979+6.9%
2023/24R4 353+9.4%
2024/25R4 723+8.5%

Affordability

For this study, Picodi created a basic grocery basket consisting of 8 groups of products: bread, milk, eggs, rice, cheese, meat, fruits and vegetables. These products in the given quantities can meet the minimum nutrient requirements of an average adult for a month.

The “survival basket” cost at the beginning of 2024 is R 1,503 (6.07% more than last year). This amount represents 34.5% of the net minimum wage, while at the beginning of last year, it was 35.6% of the minimum wage.

This means the increase in South African minimum wage kept up with the rise in food prices.

However, people have different food preferences and different perceptions of comfortable living. Therefore, Picodi decided to compare the cost of the basic grocery basket in all the studied countries and juxtapose it with the minimum wage in each country.

South Africa is far behind those countries, with the survival basket accounting for 34.5% of the minimum wage (49th place out of possible 67). In this regard, South Africa ranks higher than other developing countries such as Mexico (35%), Brazil (37.1%), Ukraine (49.3%) and India (58.5%).

Picodi noted the grocery basket used in this study is a contractual basket of food products created only for statistical purposes. The amounts given were calculated based on the recommendations of some of the health ministries regarding the minimum standards of food consumption.

The product prices were taken from numbeo.com, where consumers from around the world monitor the prices of food and other products and services.


Read: Big pay hike for domestic workers coming in 2024 – here’s how much you could be paying

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