What a ‘livable wage’ should be in South Africa – according to researchers
The estimates of a minimum livable monthly income in South Africa for 2024 sits at R15,000 – significantly higher than the average monthly income of minimum wage workers across the country.
This view was outlined by Professor Ines Meyer from the University of Cape Town, who said that the figure reflects the outcomes of the Living Wage South Africa Network’s (LWSAN’s) quality of life survey of low-earning participants.
Also the chairperson of the LWSAN, Meyer explained that the Living Wage of R15,000 is remuneration that is seen as sufficient for the country’s lowest-earning workers to provide for their families, with enough left over for savings to cover unforeseen emergencies.
“This [R15,000] affords the opportunity to live a ‘decent’ life in the sense that it gives people a choice over areas of life that matter to them,” said Meyer.
”The LWSAN encourages the public and employers to consider the plight of these earners who struggle to afford the bare essentials the rest of us take for granted,” added LWSAN chairperson.
Effective from 1 March 2024, the minimum wage in South Africa was set at at R27.58 an hour. When calculated at 8 hours per day, the average monthly wage for minimum wage workers (160 hours a month) sits at just over R4,633.44, with a maximum of R5,074.72.
Median earnings data from Stats SA shows that domestic workers have the lowest median salaries in the country, coming in at around R2,350 a month. This is less than half the national median of R5,417 a month and below the national minimum wage of approximately R4,600.
Research from the Pietermaritzburg Economic Justice & Dignity Group (PMBEJD) highlights that in most South African households, only one family member works, thus one wage must support, a reductive average of 4 persons.
Based on this wage, the PMBEJD has calculated that the minimum family food shortfall is 40.3%.
This is because after securing transport and electricity alone, minimum wage workers are left with R2191,75. If all of this money went to food, then for a family of four, it would provide R547.93 per person per month.
The Food Poverty Line is R760. “The National Minimum Wage is a poverty wage – it hurts workers,” who ultimately have to make many sacrifices of essentials just to get by, said the PMBEJD.
“We complain about living month-to-month, but many low-earning families survive from morning-to-morning,” said Meyer.
The UCT professor explained that even relief programmes, like basic free electricity, are restricted and require an applicant to be identified as an indigent, “so, you’d have to remain in poverty just to qualify for them.”
Meyer said that “a number of people insisted that R15,000 could never cover their monthly obligations,” which she ultimately agreed with.
“It is hard to make ends meet on R15,000, yet most who work in South Africa earn even less – if it is difficult to live on R15,000 per month, how shall those whose income is even lower get by?” said Meyer.
“It’s not hard to see what a tremendous difference R15,000 could make to their existence and their dignity as humans – unfortunately, [many] employers continue to measure a worker’s worth by the value their labour offers the company based on job gradings and benchmarks, not their inherent value as living beings.”
“This thinking developed almost a century ago when the world looked very different to today.”
“We sincerely need to question this outdated thinking and create a cultural threshold where compassion for our fellow human aligns with corporate ambition,” as an increased wage bill can lead to improved financial performance for companies due to increased productivity, she added.
Researcher at Nelson Mandela University, Sebenzile Masango, outlined that arguments against having a national minimum wage and increasing these salaries are based on claims that it leads to job losses, prevents low-skilled job seekers from getting jobs, undermines the unemployed who are trying to enter the labour market and that it might be unaffordable for businesses.
However, Masango said that there are arguments that some of these claims are misguided.
Proponents of a higher minimum wage say that it reduces inequality and improves the relative living standards of the low-paid.
“The Brazilian experience has shown that higher minimum wages do not automatically lead to job losses – instead, they lead to an increase in spending and reduce inequality,” said Masango.
Regardless, recent data shows that many of those who pay the wages of lower-income earners in South Africa are facing increasing financial constraints, which could hinder significantly boosting salaries.
The Credit Stress report from Eighty20 revealed that middle-class South Africans were seeing an increased rate of new defaults on loans, while wealthier households were increasingly turning to credit to make it through the month.
The pressure on households has been felt across the economy, with the final quarter of 2023 showing weak consumer spending and retail sales, putting the country at risk of entering a technical recession.
According to Eighty20’s data, middle-class households have a credit-instalments-to-monthly-income ratio of 73%, while heavy-hitters (the wealthiest 5% of the population) carry a ratio of 61%.
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