{"id":132145,"date":"2016-08-01T19:15:16","date_gmt":"2016-08-01T17:15:16","guid":{"rendered":"http:\/\/businesstech.co.za\/news\/?p=132145"},"modified":"2016-11-21T10:00:31","modified_gmt":"2016-11-21T08:00:31","slug":"how-a-r4000-south-african-minimum-wage-compares-to-the-rest-of-the-world","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/finance\/132145\/how-a-r4000-south-african-minimum-wage-compares-to-the-rest-of-the-world\/","title":{"rendered":"How a R4,000 South African minimum wage compares to the rest of the world"},"content":{"rendered":"

[Update: A pervious version of this story had the incorrect calculations, and has been updated with the accurate values]<\/em><\/p>\n

With countries such as the USA and UK moving to increase the levels of their minimum wages, South Africa is debating the implementation and subsequent effects of a similar policy back home.<\/p>\n

Research from the Wits School of Economic and Business Sciences’ National Minimum Wage Research Initiative (NMW-RI) has proposed a national minimum wage of around R4,000 a month<\/a><\/strong> being implemented in the country to uplift the 2.35 million workers who do not currently benefit from collective bargaining in the country.<\/p>\n

The level of minimum wage has been a tricky subject, with the proposed limits set anywhere between R3,000 and R8,000 or more – while economists have argued anything more than currently in effect threatens to kill jobs in a market that can ill afford it.<\/p>\n

Assuming South Africa introduces a national minimum wage at a level of R4,000 a month, the wage would still rank as one of the lowest in the world – even compared to similar markets such as Mexico.<\/p>\n

A comparison<\/a><\/strong> done in April by the World Economic Forum found that countries like Australia, Luxembourg and Belgium offered citizens the highest minimum wages (between US$8.50 and US$9.50 an hour) – while countries like Mexico and Latvia had some of the lowest (US$1.00 to US$1.50 an hour).<\/p>\n

Taking a prospective monthly wage of R4,000, and adjusting it for purchasing power parity (R5.52\/$<\/a><\/strong>) across a typical working month (40 hours a week for 4 weeks or 20\u00a0days – 160 hours total), South Africa’s potential hourly wage would come in at US$4.52 an hour – putting it in the middle of the countries listed in the WEF’s comparison.<\/p>\n

A minimum wage of R8,000, as suggested by Pacsa<\/a><\/strong>, would put South Africa far above other countries at\u00a0US$9.06 per hour – which would make it the third highest.<\/p>\n

South Africa’s current average minimum wage (taken from all sectors’ collective bargaining) of R2,340, is significantly lower at only US$2.65, but still not in the bottom 5.<\/p>\n

\"minimum-wages-across-the-world-2\"<\/a><\/p>\n

 <\/p>\n

The great minimum wage debate<\/strong><\/p>\n

According to the WEF, inequality often starts in the labour market, and a broad package of coherent labour market policies – including minimum wages – is vital to tackle inequality and ensure that economic growth benefits everyone.<\/p>\n

“Ensuring that the benefits of growth reach the many rather than the few is one of the great challenges of our time, and rising wages are clearly a key driver of inclusive growth,” said Jennifer Blanke, chief economist at the World Economic Forum.<\/p>\n

“When wages remain stagnant, imposing a minimum wage is one vehicle for driving them higher.”<\/p>\n

Echoing sentiment from anti-minimum wage groups, however, the WEF noted that, while a minimum wage leads to higher wages for those with jobs, a downside is potential job cuts and higher unemployment – something South Africa can scarcely afford.<\/p>\n

Despite this, “history has shown that minimum wages that are not ‘too high’ have a benign effect on unemployment, and can be an effective lever (although the threshold is of course difficult to determine),” Blanke said.<\/p>\n

Research conducted by NMW-RI found that at a level of around R4,000, the benefits to South Africa would outweigh any negative effects. Economists have disagreed, however, and said the move would destroy jobs in the country<\/a><\/strong>.<\/p>\n

More on the minimum wage<\/h3>\n

Pacsa says you should pay your domestic worker R8,000 a month \u2013 minimum<\/a><\/strong><\/p>\n

This is how many domestic workers in South Africa have lost their jobs in 2016<\/a><\/strong><\/p>\n

What you need to know about minimum wage in South Africa<\/a><\/strong><\/p>\n

We don\u2019t need a single minimum wage in South Africa: Mboweni<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

With countries such as the USA and UK moving to increase the levels of their minimum wages, South Africa is debating the implementation and subsequent effects of a similar policy back home.<\/p>\n","protected":false},"author":10,"featured_media":128287,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11121],"tags":[26],"class_list":["post-132145","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-finance","tag-headline"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/132145","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=132145"}],"version-history":[{"count":5,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/132145\/revisions"}],"predecessor-version":[{"id":143851,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/132145\/revisions\/143851"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/128287"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=132145"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=132145"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=132145"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}