Living wage debate

The minimum wage in South Africa is a statutory minimum that all employers must pay, but the real issue that needs to be addressed is the living wage, which is generally a higher level of income.

This according to Martin Hopkins, executive committee member of the South African Reward Association – a professional body aimed at promoting the reward profession and practices.

“The real issue we should be confronting is not just the minimum wage but what a living wage is, and how to begin paying it,” said Hopkins. A living wage can provide for a ‘frugal but dignified life’ for the employee, he continued.

“Companies should see paying a living wage as a strategic imperative that will improve employee engagement, improve relations with important stakeholders and contribute to social stability.”

Minimum wages are currently set by sector and, according to Hopkins, would be between R3 500 and R3 700 per month. Just paying the minimum wage created a category of the ‘working poor’, and they were a destabilising force, both in the company and in society, because they supported perceptions that ‘the system’ was biased to those at the top, he added.

“However, we should not lose sight of the fact that there are relatively few people equipped to lead a large company, where the slightest miscalculation can have devastating consequences for share and stakeholders.”

He said that remuneration policies should contribute to the company’s social license to operate. “One should not underestimate the challenges that many companies would face in paying a living wage, which would be significantly higher than the minimum wage but, equally, one should not lose sight of the fact that it is imperative in order to rebuild social trust in business, and to defuse the antagonism that has built up between labour and employers – something that is impeding growth.”