Factors determining business sustainability are not the same when determining the living requirements of employees. It is wrong to confuse the sustainability of jobs and businesses with maintaining or improving the living standards of employees.
Making a living wage the focus of workplace pay negotiations indicates the failures of government at all levels to –
- provide a better life for all, and
- create an economic environment to support the survival, profitability and growth of businesses of all sizes.
South African basic living costs of employees are very high. Consider the increases in cost of amongst others food, clothing, housing, utilities, transport and education. But these should be the concern of all tiers of government and not employers.
Any minimum wages need to be fixed at levels where new entrants to the labour market can be absorbed at an affordable and sustainable cost.
Our minimum wages are determined by Ministerial Determinations for various economic sectors. The procedures are prescribed by chapter 8 of the Basic Conditions of Employment Act 1997. The process obliges the Minister of Labour to research the economic well-being of a sector, and fix the minimum wages accordingly.
A living wage is different because it focuses on the employee and depends on a wide range of factors that determine what an employee needs to earn.
Unfortunately for employees the ultimate worth of any job in the private sector is the ability of employers to pay them for work that must covered by income.
Employers can only be expected to pay employees what can be measured as a ‘fair exchange of value’ in conducting a sustainable business.
Wages fixed by collective bargaining are not meant to be minimum wages. Bargaining Councils decide the levels of pay for their sectors. The contentious issue is the extension of such pay levels to non-parties and thereby preventing job-seekers from entering the labour market.
In some Sectoral Determinations the minima for higher job levels are also specified but here are some examples of the basic minima (in Rs per hour with approximate daily rates in brackets):
- Forestry – 6.55 [R59 per day]
- Farming – 7.71 [R70 per day]
- Taxi – 8.24 [R74 per day]
- Domestic – 8.95 [R81 per day]
- Wholesale and retail – 11.68 [R105 per day].
Recently negotiations in Bargaining Councils have resulted in strikes and entry pay has been fixed at levels considerably higher than those determined by the Minister.
Some examples of entry level job (in Rs per hour with approximate daily rates in brackets) concluded by collective bargaining are
- Metal Industry – 28.34 [R227 per day]
- Public Service – 28.47 [R228 per day]
As the amounts shown above are only the direct pay levels it is necessary to add the costs of any additional employee benefits.