New “living wage” for South Africa
As South Africa prepares to introduce a new minimum wage in the coming months, it is unlikely to be enough to lift people out of poverty. It can be compared to a “living wage,” which is a salary sufficient to enable workers to maintain a frugal but dignified standard of living, explains professional services firm PwC.
This represents a salary sufficient to cover expenses for food, water, housing, education, medical transport, clothing and other basic needs.
Although there is currently no official definition of living wage, PwC looked at three different measures to arrive at a figure, including:
- International living wages adjusted to the cost of living;
- Project data on decent standard of living;
- The living wage published by Trading Economics.
International living wages adjusted to the cost of living
PwC conducted a statistical analysis of published living wages from 256 European countries to determine an approximate South African equivalent wage by applying a cost of living and exchange rate adjustment.
The group calculated this based on two types of households:
- The first represents the typical nuclear family with two adults and two children. It is assumed that one partner is a full-time worker and the second works four days a week
- The individual living wage represents the gross monthly income needed to support a household with a single person, without children, employed full time.
To make the analysis more meaningful for South African employers, PwC has included the following additional data points:
- A person contributing to a family: Determine what an adult working full-time would need to earn to support a typical family of four;
- Family of five: The standard family calculation was adjusted to include an additional dependent who was not working;
- Family of six: The standard family calculation was adjusted to include two additional dependents who were not working;
Data shows that only one person will have to win anywhere between R5.582 to R9.648 per month to earn a living wage. This number goes between R6.972 and R12.756 for a family of four.
A family of six will need a living wage between R17.232 and R32.271.
The Decent Living Standard Project
According to research partners Studies in Poverty and Inequality Institute (SPII), Labor Research Service and South African Social Policy Research Insights, the average South African needs to win R7,911 or more per month in order to maintain a decent standard of living (DSL).
DSL is defined as living in a South African household with 21 socially perceived necessities (SPNs) that have been determined to be essential for everyone to have or have access to a decent standard of living.
The amount of R7,911 is determined as the median per capita household income of people who have a full set of all 21 SPNs.
Other Living Wages
Economics and financial markets data provider Trading Economics estimates that the living wage in South Africa is R6,700 per month for an individual and R10,630 per month for a family.
Its conclusions are based on the cost of living for a predefined food basket derived from the Food and Agriculture Organization of the United Nations (FAO) database distinguishing 50 food groups with national models of food consumption in units per capita, for housing and for transport, with a margin for contingencies. expenses. Price data for these items is collected through an online survey.
The group does not give its own definition of a “family”.
The Pietermaritzburg Economic Justice and Dignity (PMBEJD) group has conducted research showing that to feed a family of four with basic foods, and also cover the cost of electricity, transport and basic hygiene products, a individual breadwinner should derive an absolute minimum of R5,885 per month.
The group has in the past advocated for a minimum wage of R8,000 per month to ensure a dignified life for households.
PMBEJD data shows that 55% of South Africans – some 30.4 million people – currently live below the upper poverty line of R1,335 per month.
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