Nearly 30 million South Africans are trapped in poverty through a low Basic Wage

28/11: Nearly 30 million South Africans are trapped in poverty through a low Basic Wage, say recent reports. Statistics SA’s latest Poverty Trends in South Africa report also showed that one quarter of South Africa’s population (25.2% or 13.8 million people) live below the food poverty line; and 55.5% (30.4 million people) live below the upper bound poverty line.

For black South Africans, 64.2% (around 29 million people at mid-year population estimates for 2017) live below the upper bound poverty line. A Basic Wage for the majority of black South African workers, when dispersed through a family, is a poverty wage. The median wage for Black South Africans is R2,900 a month – dispersed through a family of 4, the wage is R763.16 per capita per month (the upper bound poverty line is R1,138 per capita per month).”

“This figure is extremely low if we consider that the monthly cost of a basic but proper nutritious diet for a very active man is R690.52 in August 2017,” says Pietermaritzburg Agency for Community Social Action (Pacsa) in a recent report.

“Poverty wages do not allow workers and their families to eat properly as transport, electricity, education expenses and other essential costs compete viciously with the food budget. Poverty wages, or a very low Basic Wage, have severe implications for productivity and the ability of workers to resist illnesse, including the ability of workers to buffer shocks and save for retirement,” the report continued.

The South African government has suggested a Minimum Wage Rate. But the proposed national Minimum Wage Rate proposed by the South African government, at R3,500, won’t do anything to change this, it said.

Pacsa has maintained that, because many poor households are dependent on one salary, a South African minimum wage needs to be around R8,000 a month for a family of five to live a dignified life.

Currently, in accordance with the Basic Condition of Employment Act (BCEA), the Minister of Labour may set minimum terms and conditions of employment including minimum wages. There is no single national minimum wage in South Africa. Minimum wages are set at the sectoral level and area level: for vulnerable sectors, the sectors, which have low union density or where market wages are quite low. Sectoral determination for setting minimum wages is done in consultation with the Employment Conditions Commission.

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