The Department of Employment and Labour has published the new National Minimum Wage for South Africa.<\/p>\n
The minimum wage will be hiked by 9.62% for the year, taking the going rate to R25.42<\/strong> (up R2.23 from R23.19 before).<\/p>\n Farm workers will earn a minimum in line with the rate, as will domestic workers. However, workers employed in expanded public works programmes will be entitled to a lower rate at R13.97 per hour.<\/p>\n The new minimum wage means that domestic workers in South Africa should see a 9.6% pay hike. Calculated at 8 hours a day, the monthly wage for domestic workers (160 hours a month) should increase from around R3,700 to R4,100<\/strong> \u2013 an increase of R400<\/strong>.<\/p>\n According to the department, however, most jobs earning the minimum wage will see their wages increase to R1,144 a week (45 hours)<\/strong>\u00a0or R4,957 a month (195 hours).<\/strong><\/p>\n The increase to the minimum wage came in higher than initially expected.<\/p>\n When the department started consultations on the increase, it was planning for a hike of around 8%, slightly ahead of CPI, which has been sitting above 7% for the past few months, only dropping to 6.9% in January.<\/p>\n CPI is expected to average between 5% and 6% in 2023.<\/p>\n Despite the above-inflation hike to the national minimum wage, low earners in South Africa are still expected to face significant pricing pressure this year.<\/p>\n Most notably, while headline inflation is cooling off and moving toward the South African Reserve Bank’s 3% to 6% range, food prices in the country are going in the opposite direction, remaining stubbornly high.<\/p>\n According to the latest inflation data from Stats SA, the annual food inflation rate climbed to 13.4% in January, the highest reading since April 2009, when the rate was 13.6%.<\/p>\n Of all the product groups in the CPI basket, bread & cereals recorded the highest rate in January (21.8%). This was up from 20.6% in December and is the highest reading for this category since February 2009 (23.8%).<\/p>\n Bread & cereal products that recorded notable monthly increases in January include pastry products (pizzas and pies), which increased by 3,6%, maize (up 3.1%), and brown bread (up 1.3%).<\/p>\n Meat inflation increased to 11.2% in January from December\u2019s 9.7%. Individually quick frozen (IQF) chicken portions, the highest-weighted meat product, witnessed a monthly price increase of 2.7% between December and January.<\/p>\n All these staples are far higher than the minimum wage hike.<\/p>\n Food purchases make up a significant portion of lower-income households’ spending each month, with data from the Pietermaritzburg Economic Justice and Dignity group showing that a nutritional basket of food sets a household back over R4,900 a month – R800 more than the new monthly minimum<\/strong>.<\/p>\n This is before factoring in other essentials like hygiene products, transportation and electricity.<\/p>\n Electricity prices are another major sticking point, with energy regulator Nersa approving an 18.65% hike in electricity tariffs for Eskom direct customers from 1 April 2023 – and even higher hikes expected from municipalities from 1 July 2023.<\/p>\n For the national minimum wage to simply absorb the coming electricity price hike, the PMBEJD said it would have had to have been hiked by 11.8%.<\/p>\n