What unskilled workers in South Africa earn vs national minimum wage

 ·23 Nov 2016

New research from data mining group Analytico shows how current wages in South Africa’s unskilled labour sector compare to the proposed national minimum wage of R3,500 per month.

According to Analytico’s data, several industries in South Africa already carry an average monthly wage that is above the R3,500 minimum proposed – however, out of the 10 industries assessed, seven come in below the proposed lower limit.

Data was obtained from Statistics South Africa and processed using Analytico’s algorithm.

Analytico said its earnings comparison was conducted on the elementary work group of occupations. These are occupations that require the lowest qualifications to perform a job.

Thus, it is reasonable to view it as an unskilled set of occupations, the group said.

“The rationale for selecting this skill level are that these are the skill level/occupations that will be the most affected by the national minimum wage,” the group said.

This level of occupation was taken into account in 10 sectors, across four provinces – namely Gauteng, the Western Cape, KwaZulu Natal and the Eastern Cape.

Notably, only Gauteng offered a median minimum wage above the proposed level of R3,500, and even then, it was only over marginally.

The table below details the findings:

Industry Gauteng Western Cape KwaZulu Natal Eastern Cape Median earnings Industry differential
Electricity, gas and water supply R6 430 R5 834 R3 987 R1 979 R5 230 +33%
Mining R4 331 R3 370 R3 515 R1 815 R3 850 +9%
Transport R4 125 R3 244 R3 380 R3 071 R3 672 +5%
Manufacturing R3 808 R3 088 R2 548 R2 605 R3 238 -8%
Social services R3 840 R3 479 R2 123 R2 181 R3 179 -10%
Wholesale and retail R3 553 R2 950 R2 335 R1 945 R2 988 -17%
Financial R3 389 R2 833 R2 015 R2 067 R2 886 -21%
Private household R3 265 R2 506 R1 848 R2 022 R2 432 -44%
Construction R3 489 R2 879 R1 595 R1 393 R2 390 -46%
Agriculture R3 362 R2 686 R1 740 R1 679 R1 989 -76%
Median earnings per province R3 607 R3 004 R2 022 R1 860
Provincial differential +3% -17% -73% -88%

The national minimum wage is an ongoing debate in South Africa, with the latest proposal of R3,500 per month just the starting point.

According to analysts, there is a long road ahead to the projected full implementation date of mid-2019, by which time (taking inflation into account) the wage could be set just under R4,000.

Various sectors have society have weighed in on the matter, with political parties such as the EFF and unions saying that the R3,500 wage is far too low (seeking a level at R4,500 minimum) – while economists and business leaders have said that the wage is too high, and will lead to job losses.

According to modelling by the University of Cape Town and National Treasury, South Africa could see between 500,000 and 715,000 job losses as a result of the wage limit – a figure that would not sit well with a country that has an unemployment rate of 27.1%.

However, other economists have said that the initial job loss figure won’t be nearly as high as the figures quoted – but rather the future hiring practices of companies are a bigger risk, which will lead to the same outcome: even higher levels of unemployment.

Read: Who is going to pay for South Africa’s national minimum wage?

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