Wage Drop in South Africa

South African workers took home much smaller disposable salaries in August 2016 than they did in August 2015, as inflation accelerated but growth in wages slowed.

The BankservAfrica disposable salary index, released on Wednesday, shows employees took home 2.5% less in August than a year earlier — the third consecutive month of declines in real disposable salaries. "For the first eight months, real take-home salaries declined by 0.4%," it said.

"While workers received salary increases in nominal terms, the real value for these ended up being lower due to the higher rate of inflation," BankservAfrica head of knowledge and risk services Caroline Belrose said.

Fact of the Day

According to the International Labour Organization (ILO), if you earn the median wage in Kenya, your real income has declined 26 percent from 2008 through 2013. 

Egyptian real median income declined 10 percent

The colonialists paid better!

Uganda was governed by British colonialists for almost a century. Casual wisdom would suppose that the colonialists had more income inequality than Museveni. Sorry; look again: Just before independence in 1962, the office cleaner, the porter – the lowest government employee – was earning Shs150. Excluding the governor, the highest-paid employee got around Shs6,000. Professors, medical consultants, ministers, permanent secretaries, district commissioners, boarding secondary school headmasters; all those senior people (Ugandans or white expatriates) were in the relatively narrow bracket between Shs2,500 and Shs6,000. Full primary (P6) school teachers got about Shs400. University graduates in teaching and most other government jobs started at around Sh1,300. A doctor got Sh1,700. All annual increments were predictable.
Let us compute: The highest official (Shs6,000) got only 40 times as much as the porter (Sh150), and less than five times as much as a fresh university graduate (Sh1,300).

Under Museveni, the lowest office attendant gets about Shs150,000. A primary school teacher gets Shs260,000, and a fresh university graduate in teaching or mainstream civil service gets about Shs450,000. A fresh doctor gets about Shs600,000. Up to that point, the ratios are close to the colonial model. But above Shs2 million, salaries have become wildly arbitrary. With Shs30 or 40 million per month, each of the best-paid government officials hauls away 200 times as much as the lowly officer gets in his slave pay packet. This has far-reaching socio-political implications; because, however packaged or disguised, the wealth being dished out comes from the collective effort of our people. Glancing at the colonial salary ratio of fourty-to-one, the departed British governors must be smiling in their graves.

Allan Tacca
From here

The rewards of academia

It might come as a surprise to academics in South Africa but the purchasing power of their salaries, on average, is now higher than that of their counterparts in Canada, the UK and New Zealand, according to a survey of 46 Commonwealth universities.

At the same time, South Africa has the highest salary scales relative to national gross domestic product per capita and the overall average academic salary is seven times the GDP per capita. This is perhaps not surprising for a developing country where joblessness is high and average per capita income is low, and where there are deep inequalities between rich and poor.

South Africa ranks second overall with an average of PPP US$78,653 while Canada and the UK are in third and fourth place respectively. This is in contrast to the survey in 2006-07 when South Africa was at the bottom of the ranking. South Africa has the highest salary scales relative to national GDP per capita (the overall average academic salary is seven times the GDP per capita) and also saw the highest level of growth in academic salary scales since the last survey (51%). In South Africa, the large diversity in salary levels is due to the relatively high level of institutional autonomy.

African poverty

From the latest International Labour Organization report :-

Percentage of population who earn less than $2 a day

Uganda (2002) 95.7
Nigeria (2003) 92.3
Tanzania (2000) 90.2
Rwanda (2000) 87.8
Madagascar (2001) 85.1
Zambia (2004) 84.9
Nicaragua (2001) 81.6
Swaziland (2000) 77.7
Ethiopia (2000) 76.6

Wages and Inflation in South Africa

The trade union Solidarity warned that there exists a growing disparity in the salaries of workers and their chief executives . Solidarity said the country’s 10 highest-paid chief executives received about R47 million a year. Approximately R128,000 per day or R5,365 per hour.

The hourly remuneration of chief executives is approximately equal to the monthly pay of the average workers.

“If the chief executive takes a 15 minute tea break, this will cost his company R1,350 -- probably the most expensive cup of tea in the country,” the union said.

Official unemployment was 24.5% in September 2006 , almost the same as that of 24.4% in September 2000.

Inflation was nearing 6% but that food, medical, water and electricity, vehicle maintenance and housing increases were of 2% to 8% more than inflation .

The union warned that the 7.5% average wage settlement it expects this year will barely leave workers in the same position they were at the moment. It would not be a wage increase as such, but a wage maintainer or even a wage decrease .