TIIETSO MOTSOENENG: Raising the bar: Santam follows Old Mutual in living wage revolution

In a world in which the gap between the rich and the poor is ever widening, Santam and Old Mutual stand out as a beacon of progressive change.

Santam, the short-term insurance arm of Sanlam, followed in the footsteps of rival Old Mutual in setting a minimum wage of R15,000 a month in a commendable move that shows its unwavering commitment to social responsibility and shareholders returns. 

This is not just a corporate manoeuvre, it is a revolutionary act that challenges the status quo and paves the way for a more equitable future in SA’s financial services industry. It triples the national minimum wage.

This is not about compliance, it’s about leadership and moral responsibility. It’s about recognising that a fair wage is not just a number — it’s about dignity, respect and the ability to lead a decent life. Old Mutual’s and Sanlam’s policy is a model for other companies to follow, showing that financial success does not have to come at the expense of workers’ ability to live with dignity.

Yes, this policy is not without critics. Some may argue that such a substantial rise could lead to inflation, a stealthy theft that steals from the poor, as businesses may pass on the increased labour costs to consumers. Some may also contend that this could affect the competitiveness of SA, where the cost of doing business is already among the highest in the world, thanks to load-shedding and floundering rail transport infrastructure. 

In fairness, while Santam and Old Mutual’s financial health allow for such progressive policies, smaller businesses may struggle to match these wages without undermining commercial viability.

Still, both companies’ decisions to set a minimum wage of R180,000 a year is a testament to their leadership foresight and ethical stance. The moves reflect their deep understanding of the socioeconomic challenges faced by many South Africans, many of whom are first-generation university graduates shouldering the responsibility of “black tax” — the financial support to be provided to extended families still scarred by the legacy of apartheid. 

That is not to say R15,000 a month is enough for employees to support themselves and their extended families, but it is a step in the right direction in easing the financial strain that hampers wealth accumulation and social mobility for many black South Africans. 

One may think the implications of this decision would come at the expense of shareholders. Not a chance. Both companies’ robust financial performances, with dividend yield of 5%-7%, show that profitability and ethical business practices can coexist. This a narrative that needs to be told, a narrative that proves that businesses can thrive financially while uplifting their employees.

The policy of fair pay and the principle of a living wage is a policy that other companies should emulate and one that speaks to the heart of what it means to be a responsible corporate citizen in today’s world.

Old Mutual and Santam deserve praise for going beyond the bottom line and focusing on the wellbeing of those who are often left behind in the race for profits. If there’s anything corporate SA could take away from this initiative, it is an inspiration to take a hard look at wage structures and consider the broader societal implications of their remuneration polices.

While Sanlam and Old Mutual’s initiative is a beacon of hope in a landscape marred by greed and inequality, it is essential to balance fair wages with the commercial viability of companies, especially smaller ones. Even so, it is hard to ignore that these two companies are raising more than just wages, they are raising the bar for everyone. And for that, they deserve not just our praise but our support and our attention. 

Motsoeneng is Business Day deputy editor.