Wednesday, November 30, 2016

Low wage South Africa

In South Africa people earning from R12,500 monthly ($860 or £700) are being classified in the group of the country’s wealthiest for government policy purposes It certainly isn’t enough for a life of luxury. You’d be hard-pressed to do much saving and investing on that income or even afford a comfortable home with a home loan.

More than 16m South Africans are desperately poor, while 6.5m with monthly salaries from R12,500 and up are among the country’s richest, according to the research presented to the government. Imraan Valodia and David Francis of the University of the Witwatersrand were part of a team that suggested the country’s minimum wage should be a monthly R3 500 ($250; £200) on the basis of these figures.

6.2 million or 47% of working people in South Africa earn less than R3,500, while 4.6 million (35%) earn less than R2,000 per month.  1.1 million domestic workers – 887 000 of them women – earning less than R3,500 per month. In community services, 1.2 million workers earn less than R3,500 per month. Approximately 800,000 of them are women. The median wage for employed women in 2015 was only 77.1% of the wage for employed men. This means that a woman in the middle of the wage distribution earns only 77 cents for every R1 her male counterpart earns.

What is clear from this research is that the yawning gap between rich and poor is a problem that won’t be solved by playing around with the minimum wage level.

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