R15,000 minimum wage in South Africa slammed

Some South African unions are calling for the national minimum wage to be increased to R15,000 per month as workers suffer from a rising cost of living. 

The current minimum wage in the country is R27.58 per hour, which translates into a monthly salary of R5,049.76. 

SAFTU-affiliate, the General Industries Workers Union of SA (Giwusa), said this amount is completely out of touch with the rising cost of living in South Africa. 

“With inflation rates on basic necessities for workers consistently outpacing wage growth in many of these sectors, the purchasing power of the national minimum wage is condemning these workers to a life of permanent poverty,” the union said. 

“It has diminished substantially and thereby ensuring a dramatic fall in the already miserable standards of living to new appalling depths.” 

The national minimum wage has been in effect since 2019, when it was pegged at R20 an hour. It has been gradually increased to R27.58. 

“The current wage structure in SA exacerbates economic inequality, with the gap between the wages of workers and the earnings of corporate executives reaching unsustainable levels.”

This demand is broadly in line with estimates of a livable monthly wage in South Africa. 

Professor Ines Meyer from the University of Cape Town explained that R15,000 is seen as sufficient for the country’s lowest-earning workers to cover a rising cost of living, with enough left over to save a portion. 

Research from the Pietermaritzburg Economic Justice & Dignity Group (PMBEJD) highlights that in most South African households, only one family member works. Thus, one wage must support a reductive average of four persons.

Financial services groups, including Old Mutual and SA’s largest short-term insurer, Santam, have already set their minimum wage at R15,000 per month, which could put pressure on other financial services companies to reconsider their minimum wages.

Some other unions and their respective federations, such as COSATU, have been more conservative in their demands. 

COSATU has asked for a CPI+3% increase to the national minimum wage for 2025. 

However, this relatively more conservative demand is no less damaging to the South African economy and its unemployment rate. 

Apart from the likelihood that increases above inflation for such large numbers of workers will result in higher inflation, a sharp rise in wages may result in higher unemployment. 

Efficient Group chief economist Dawie Roodt said it is vital to remember that these unions speak on behalf of the employed and not the millions of unemployed South Africans. 

“Their workers, who still have a job, will be smiling. In the meantime, there are more than 10 million South Africans without a job. If we give them that increase, that 10 million will probably become 11 million,” he said. 

Roodt also pointed out that many union members are civil servants who are generally well-paid and underworked, making them highly inefficient. 

Aside from this, repeated above-inflation increases for these members have put the state’s finances under immense pressure. 

“South Africa’s state finances are in a dire state. If we keep paying civil servants the increases we have over the past decade, then we will get into deep financial trouble.” 

“We are heading for a financial crisis in South Africa. The state owes too much money, and we cannot afford it. The money is finished. There is no more money.” 

“I want to pay civil much, much more. But, this is a very important but, they must be dramatically more efficient and productive.” 

“I am afraid, COSATU, you are part of the problem and are not part of the solution.” 

Roodt also explained that repeated increases to the minimum wage make South Africa less competitive globally, hinder economic growth, and prevent businesses from employing more people. 

“The actual minimum wage in South Africa is zero. It is zero. If you do not have a job, you get zero. That is the minimum wage. The more we push for a higher minimum wage, the more people will end up with zero.” 

If the minimum wage was removed, salaries would fall, Roodt admitted. But this would reduce the input costs of goods and services in South Africa, making it more competitive globally, and boosting economic growth and employment.