Minimum Wages Must be Living Wages: Workers Support Families

food prices livelihoods unemployment
Thursday, 30 April, 2015 - 09:24

This month’s PACSA Monthly Food Price Barometer focuses on the significance of ‘acceptable’ living wage and other factors affecting, food prices and other critical factors affecting the working class 

The Pietermaritzburg Agency for Community Social Action (PACSA) Minimum Food Basket in March 2015 for a family of four members increased from R2 155.62 to R2 170.04, a R14.42 or 0.67 percent month-on-month increase. This increase in the cost of a basket of food has to be considered against the increasing price trends in the International Commodity prices for staple foods and the Consumer Price Index (CPI) food month-on-month increases (up for the third month since January) and importantly against the backdrop of the urgent debate on minimum wages. In this statement we advance the view that a minimum wage must be set at a level of a living wage.
 
South Africa has a history of low wages supported by an artificially created system of cheap labour. This was the function that the Bantustans served during the colonial and apartheid periods and our labour market, consistent with our economy, has not been transformed since 1994. Twenty-one years into our new dispensation we have not yet resolved the disconnect between a wage paid to an individual worker; and a living wage which would enable the individual worker to support her/his family.
 
The debate on minimum wages provides an opportunity to reshape our labour market and economy if we frame minimum wages as the connection between wages and household livelihoods. Hence we cannot just look at minimum wages the way we have always done before - that is of ensuring that an individual is paid a little bit more for her/his individual productivity value; what we need to do is consider minimum wages as living wages. That is the level of the wage which enables a worker to support her/his family. The two paragraphs below provide statistical data which show why we need to start thinking differently about minimum wages.
 
Too few workers are employed and the wage levels granted to these workers is too low to enable workers to support their families. Statistics South Africa’s (Stats SA) latest Quarterly Labour Force Survey for the 4th quarter (2014) indicates that only 43 percent of the total working-age population between the ages of 15-64 years is employed (15 million out of 35 million people). Stats SA’s mid-year population figures for 2014 shows that our entire population of 54 million people is supported by just 28 percent of people. Disaggregating these figures along racial lines, only one out of four (25 percent) Black South Africans are employed; compared to one out of 2.3 (42 percent) White South Africans. For Black South African households this means that one wage must support four people; for White South African households this means that one wage must support two people. Because of such low levels of labour absorption - the level of wages become important.
 
In 2013, the median wage was just R3 033 and 50 percent of workers earned below this level. The average minimum wage set by the Employment Conditions Commission across sectoral determinations for 2014 was in the region of R2 362.36 per month. This wage granted to a Black South African worker would have to support four people. Noting that food is not the only expense that this wage would have to meet, it is however instructive that PACSA’s March 2015 figures for the cost of a basic but nutritious basket of food for a household of four was R2 170.04. A wage of R2 362 divided by four provides R590.50 per person per month. R590.50 is below Stats SA’s 2015 newly rebased and reweighted upper bound poverty line of R779 a month. Today, more than half the South African population (approximately 27 million people) lives below this poverty line. At this level individuals are forced to compromise food to secure other essential items such as transport and electricity.
 
We need urgently to find ways for the idea of a living wage to enter our collective psyche. A useful starting point is to return to the original idea behind why workers go out and sell their labour, which is to enable families to live at a certain level of dignity. Embedded in this idea is how the wage can be used as an instrument to invest in our social base, joint humanity and our long-term collective future. In this discussion we cannot allow ourselves to be conned by the uninspired idea that the only determining factor in wage levels is an amorphous productivity value not yet unfettered from exploitation; nor that wages have no role in supporting anyone but the individual worker or building the social base. We need to urgently agree on the principle of a living wage, allow a social dialogue to work out the modalities of the ‘how’ and then regulate it rigorously.
 
PACSA Food Price Barometer tracks the price of a basket of 36 basic food items from six different retail stores servicing the lower-income market in Pietermaritzburg, KwaZulu-Natal. The barometer serves as an index for food price inflation and provides insight into the affordability of food and other essential household requirements for working class households in a context of low wages, social grants and high levels of unemployment. The Minimum Food Basket tracks the price of a basket of basic foods required for good quality but basic nutrition. The Minimum Food Basket report can be accessed at www.pacsa.org.za. For further information on the monthly food price barometers and food affordability research, contact Julie Smith, email: julie@pacsa.org.za or 033 342 0052.
 
For more about PACSA Monthly Food Price Barometer, refer to www.pacsa.org.za.

Related organisation(s): 
Pietermaritzburg Agency for Community Social Action (PACSA)

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