South Africa is in a bind – the country’s economy wobbled in the first quarter of 2018, shrinking by 2.2% quarter-on-quarter, while the unemployment rate remained stubbornly high at 26.7%.
To add to consumer woes, the cost for petrol is at an all time high, while Eskom continues to push for electricity price hikes, which is over and above the 1% VAT increase in April.
And on Wednesday, BankservAfrica published its Take-Home Pay Index (BTPI) for May 2018, showing a big drop in the country’s average disposable income over the past month.
Within this pressure cooker environment, new data from StatsSA showed that as many as 24,000 domestic workers lost their jobs in the first quarter of 2018, to the end of March.
According to the stats body, domestic workers make up nearly 8% of the country’s black workforce, and even outnumber professionals.
StatsSA’s date showed that the country employed 991,000 domestic workers by the end of the first quarter, versus 873,000 professionals.
Additional complications for the sector include the implementation of a national minimum wage. Members of Parliament approved the bill on a national minimum wage at the end of May.
The NMW, which will see a minimum wage of R20-per-hour implemented, is currently with the National Council of Provinces for approval before it can be passed into law.
Plans for the implementation of the NMW come into direct conflict with the current rates through the sectoral determination for the various sectors, including that of domestic workers, which set new minimum wage levels from 1 January.
According to the figures set out by the Department of Labour, domestic workers must get paid a minimum of R1,641 up to R2,545, depending on which area you live in. This is a 5% increase from 2017’s rates. However, these numbers are only effective to the implementation of the NMW.
While the current national minimum wage is set at R3,500 a month, things will work differently for domestic workers.
The agreed NMW at National Economic Development and Labour Council (Nedlac) is pegged at R20 an hour for major sectors, with the exception of sectors such as farm and domestic workers.
These exceptions include:
- The minimum wage for farm workers will be 90% of R20 per hour (R18 per hour);
- The minimum wage for domestic workers will be 75% of R20 per hour (R15 per hour);
- The minimum wage for workers on an Expanded Public Works Programme is R11 per hour.
Thus from the time the NW is implemented until further notice, domestic workers will earn only 75% of the NMW of R3,500 – around R2,625 a month, or R15 an hour.
The reason for the lower wage is due to the higher risk of unemployment for domestic workers if the minimum wage is too high, National Treasury said in its NWM document.
Employment by occupation