New living wage: Decent life or barely surviving?

Is the new living wage of R15 000 per month enough to live a decent life? A living wage is not the same as the national minimum wage that employers must pay workers according to law that rarely satisfies their fundamental needs. By contrast, employers are encouraged to offer a living wage voluntarily instead.

The living wage is a wage that is sufficient for a worker to provide for themselves and their families with the basic necessities of life and save something for the future or to cover unforeseen emergency expenses, Ines Meyer, spokesperson the Living Wage South Africa Network, says.

The National Minimum Wage is R27.58 per hour, R220.64 for an 8-hour day and R4 633,44 for an average 21-day working month.

The new living wage was announced at a meeting of the University of Cape Town’s SARChI Chair in Creation of Decent Work and Sustainable Livelihood.

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Workers in urban areas need R15 000 per month as a living wage

“Data we collected from working individuals across South Africa between November 2023 and January 2024 establishes that workers living in urban areas require at least R15 000.00 per month to live a decent life.”

Meyer says this is in line with the Constitution that affords citizens the right to live with dignity. “We also see paying a living wage as a way to offer people we employ dignity. However, it goes further. It is also about how we interact with employees, in practice and on paper in policies.”

The research behind the amount is not based on typical methodologies for determining wages which involves worker output, performance or labour costs, but is based on the fact that each employee is a human being with fundamental basic needs.

The approach of the research is also not focused on external factors such as inflation, housing shortages, natural disasters, government programmes or the CPI. “Instead, we consider the subjective experience of individual workers. We ask individuals across South Africa to score their own ability to make choices in different areas of life which are important to them.”

Meyer says these areas include measures such as quality of housing, employment, healthcare, physical and psychological wellbeing and more.

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This is how the living wage is determined

The researchers then graph the gathered information against their reported net income. A living wage is the amount where it becomes possible to realize the life domains which are valued.

In this way, it is possible to identify annual changes and emerging trends in their life conditions. “We use this data to determine a living wage that is both reasonable and humane,” Meyer says.

Unfortunately, Meyer says, some employers see even the minimum wage as a financial burden, let alone the costlier living wage. They argue it makes an ample workforce too expensive, resulting in higher unemployment. However, Meyer disagrees.

“International living wage research shows that workers who can cope financially are more motivated, more productive and less prone to absenteeism. This benefits their employers, who offset their costs through greater output to meet market demand. So far, there is no evidence to suggest that providing decent incomes increases unemployment.”

Not all employers are hesitant, though. Meyer says responses to a recent LWSAN member survey indicates that its work may not be restricted to South Africa for long either. “It suggests that South African multinational organisations and perhaps even companies based in other African nations are eager to get their hands on living wage data for their region.”

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Data for other countries in Africa

Unfortunately, data for the individual countries is scarce and therefore, LWSAN has its work cut out for it. It has already taken the first step by aligning with the WageIndicator Foundation in the Netherlands that publishes living wage data across the world accessible to anyone on their website. It includes living wage data on some 46 African nations, although it uses a different methodology.

“Since they are already collecting data, we are talking to the Foundation about including our approach in their research,” Meyer says.