The General Industries Workers Union of SA (Giwusa) is calling for the national minimum wage to be increased to R15,000 per month to address the rising cost of living that has seen food, transport and electricity prices shooting through the roof.
Giwusa is an affiliate of the SA Federation of Trade Unions representing more than 20,000 members across the chemicals, food, mining, cleaning, wood, food processing, plastic, furniture, glass, hospitality and security industries
In its submissions to the minimum wage commission that is looking to review the threshold now set at R27,58 per hour, Giwusa said the minimum wage was “completely out of touch” with the escalating cost of living in SA. This, the union said, posed serious challenges of daily survival for low-wage workers.
“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 not only condemning these workers to a life of permanent poverty, but it has diminished substantially and thereby ensuring a dramatic fall in the already miserable standards of living to new appalling depths,” Giwusa president Mametlwe Sebei said.
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,” Sebei said.
“In sectors such as retail, the disparity between the pay of a front-line worker and a CEO can be hundreds of times higher. This gap continues to widen leaving the majority of South African workers trapped in poverty even though they are employed.”
Sebei said the Livable Wage Report published by researchers recently highlights the inadequacy of the current national minimum wage, proposing a liveable wage of R15,000 per month.
This figure better reflects the real cost of living in SA, taking into account essential needs such as housing, transport, food, education and healthcare.
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, in a move that could put pressure on other financial services companies to reconsider their minimum wages.
In April, Cosatu parliamentary co-ordinator Matthew Parks commended the two companies, saying: “These progressive victories will benefit thousands of workers at Old Mutual and Sanlam and help spur similar initiatives in a financial sector that is [known] for being allergic to transformation and improving the conditions of their employees.”
The call for a R15,000 minimum wage by Giwusa come as economists sounded the alarm in August on above-inflation pay deals between workers and employers, saying they could keep the prices of goods and services high and relegate many people to below the breadline.
Consumer inflation eased for a third consecutive month, easing to 4.4% in August from 4.6% in July due to a lower fuel price, among other factors.
The Pietermaritzburg Economic Justice & Dignity Group said the average cost of a household food basket (nationally) is R5,227,14.
“Many among the capitalists and their think-tanks argue that increasing the minimum wage will lead to job losses, as businesses struggle to absorb the added costs. However, South African and international research shows that increases in the minimum wage can have numerous benefits,” Sebei said.
The benefits included, among others, increasing consumer spending, stimulating economic growth, boosting worker productivity and retention, reducing income inequality and poverty, and encouraging businesses to invest in efficiency and innovation.
Quoting data from Stats SA, Sebei said average spending on energy, water, and municipal bills had risen 12.2% year on year, with the average household paying R2,500 a month.
“Giwusa firmly believes that the national minimum wage must be radically increased to ensure that all workers live in dignity and that wage inequality in SA is addressed. We therefore propose the immediate increase towards a liveable wage of R15,000, reducing the wage gap between workers and executives, annual adjustments based on the real cost of living,” Sebei said.
“The past 30 years of the black majority, ANC-led democratic government have bitterly disappointed workers who elevated it to power. The government pursued neoliberal policies which transferred massive amounts of wealth from the workers to the corporate elite.”
Meanwhile, Business Day reported this week that Cosatu, which represents some of the country’s teachers, nurses, police and prison officials, seeks above-inflation increases for the lowest-paid workers, saying it would make up for the low levels of increases from 2019 to 2021 and to cushion against inflation.
It is proposing that the minimum wage be increased by CPI (consumer price index) plus 3% in 2025. If CPI is 5.9% for 2024 (as set out by the Reserve Bank), the wage should be increased by 8.9% from R27.58 to R30.03. It also suggested that minimum wage adjustments be effected on January 1 each year.
mkentanel@businesslive.co.za
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