Minimum wage of R8 000 decent, says social body

Cape Town - South Africa's national minimum wage should be set at R8 000 at least if households are to have the possibility of leading a dignified basic lifestyle, according to Pietermaritzburg Agency for Community Social Action (Pacsa).

The organisation, which campaigns for social justice and human rights, recently published economic data which showed how black households in particular are falling deeper into poverty as wages fail to help them develop financial resilience.

In its research, Pacsa considered how families in South Africa are being supported - such as the number of wage earners in one household, their income levels and family sizes - and the cost of goods and services in determining a minimum national wage.

“Pacsa imagines the national minimum wage as an intervention to deal with historical racial inequities in wage levels, righting the disconnect between the wage earner and cost to support his/her family, and ensuring that all South Africans – employed or not - are able to live at a level of dignity.

“We have proposed a national minimum wage of R8 000 for a household of five persons,” the organisation said.

In its research, Pacsa argues that when employment levels are very high it means wage levels can be lower because households have more than one source of income. If employment levels are very low, as is currently the case in South Africa, it means wage levels must be higher because households have limited sources of income.

Pacsa publishes a monthly food basket index that gives insight into the cost of food and household items for working class households in a context of low wages, social grants and high unemployment levels. The food basket, however, is not nutritionally complete, but rather a reflection of what people can afford to buy in reality.

The monthly food basket, however, doesn’t contain some of the essential nutritionally rich foods - such as high quality proteins, calcium and vegetables - as they have become unaffordable. To this end Pacsa, in consultation with a registered dietician, formulated a minimum nutritional food basket.

According to Pacsa’s monthly food barometer, its food basket increased by 13.3% in May 2016, compared to the previous year. Foods driving prices upwards were maize meal, cake flour, sugar beans and chicken pieces.

Because households are forced to buy foods with poorer nutritional value, the gap between what they are buying and what they would like to and indeed should be buying for basic nutrition is widening.

In May 2016, the difference in cost between the Pacsa food basket (not nutritionally complete) and the Pacsa minimum nutritional basket (nutritionally complete) was  R2 421.39 (R1 892.31 vs R4 313.70). It means that low-income families with seven members are underspending on nutritious, albeit still very basic, food by 56.1%. This has implications for health and wellbeing.

Pacsa argues a national minimum wage is necessary for a family of five to eat nutritionally, and be able to afford basic goods and services. “Our research in Pietermaritzburg has shown that a household of five needs at least R8 000 a month to afford the expenditures that allow a family to live at a basic level of dignity,” Pacsa said.

Pacsa compiled a comparative table to illustrate how families manage (or don’t) to make ends meet with different minimum wages.

The minimum wages were set at the following amounts:

- R1 500 – one old-age pension for 2016; 

- R1 800 – what South Africa's business sector is proposing for the national minimum wage;

- R2 362 – the average minimum wage set by the Employment Conditions Commission across sectoral determinations for 2014;

- R3 200 – the amount 60% of all Pietermaritzburg households earn, according to Statistics South Africa’s 2011 census;

- R4 500 – the minimum amount Cosatu calls for;

- R6 000 – the maximum amount Cosatu calls for; and

- R8 000 – the amount Pacsa wants the national minimum wage to be.

* What do you think would be the right amount for a national minimum wage, and why? Let us know and you could get published.