Unless you’ve been hibernating in a mountain cave, you’ll have heard about the new proposed minimum wage that’s been making headlines this week.
According to Fin24, deputy president Cyril Ramaphosa has proposed that the new minimum wage be set at R3 500.
Now, I don’t know about you, but back when I was an intern (many moons ago), the amount of money I earned fell within this bracket. At that time, while I understood it wasn’t much, it helped me to go a long way.
Besides, I was also fortunate and privileged enough to have my parents help me where I couldn’t pay my way. That said, even with that amount, I wasn’t immune to the struggles that came with the cost of living.
Now, the amount that I started off with is the amount that Cyril Ramaphosa says should be the minimum wage. That was 8 years ago! That, Fin24, goes on to add, amounts to R20 an hour.
Frankly I think that’s unbelievably shocking. To make matters worse is that at least 47% of the people currently employed in South Africa are earning a salary that’s below that number.
But at least it’s corrective measures being taken, I hear you say. That’s not the point.
The point is that the cost of living in our current economical climate is at an all time high and a mere R3 500 is certainly not enough to last a month, much less a fortnight.
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In his announcement, Ramaphosa said that the minimum wage is a way of contributing to the alleviation of poverty issues and will help to reduce inequality and unemployment rates.
Many of us who fall under higher income brackets are already struggling to cope with the rising inflation rates, so how on earth do we expect people on low income wages to survive with a measly R3 500.
As it is, some are already forced to survive on so much less (the recent news broadcast highlighted the plight of people who earn less than the proposed minimum wage and needless to say, they are really struggling).
And yet 34% of people who participated in an online vote on News24 said that this amount is too high and would likely cost jobs. It must be easy to assume that R3 500 is enough to sustain a household per month when you’re in a position of privilege.
It could certainly be argued that many people are being exploited (47% is a figure that no one should be proud of), and while the wage offer will no doubt offer some form of protection for low income earners, what the proposed offer fails to take into account is the amount of people in an average household.
In fact, another article on Fin24 adds that R3 500 is actually below poverty wage, especially if you take into the account that in black households, a salary typically supports four people in that household.
You’d barely have enough for the basic amenities, much less money for electricity, water and travelling allowances.
With this in mind, I decided to ask Winnie Kunene, who serves on the Trustee of the board of Truth About Money – a 1Life initiative, and financial expert, for her input on whether or not surviving on a basic salary is not only doable but is a viable option.
Here’s what she had to say in response to some of our questions:
Is it possible to survive on a salary of R3 500?
Any amount that a person earns is relative. No one can tell whether the money is enough or not. In other words, there will never come a time where people feel that they are earning enough and therefore don’t any more money. R3500 can be ‘enough’ for someone living in Alexander township and working within a walking distance in Sandton as that person does not have to incur transport costs.
Remember that transport costs are the second largest cost next to food. However, R3500 may not go a long way for a person living in Soweto and travelling everyday to Sandton. He/she will most probably spend at least one third of R3500 on transport.
This question is entirely dependent largely on place of work together with transportation costs to earn that money.
Just how much would that salary be able to cover in terms of expenses and basic amenities?
A great deal of spending money is dependent on an individual’s money habits, beliefs and attitudes. I have met people who earn far less than R3500 but live within what they earn.
At R3500, assuming one comes from Soweto, this salary will cover only the very bare basics. What is fascinating for me however, is how the people in this salary bracket can still have money to save up in their stockvels.
This tells you how money is relative – how management thereof is totally dependent on people’s values and characters and not necessarily on money.
What do you think is actually a fair salary minimum wage?
If people can understand the concept of ‘living within their means’ any salary will be ‘enough’. We have to take into consideration the types of jobs that people do. I have not yet seen a domestic worker earning R10 000 per month.
Even if she were to earn that much, if she cannot manage it properly, R10000 will never be ‘enough’ and she/he will always feel a fair salary should be more.
The secret is to learn to manage what we have. The reality is, most people will be stuck in their jobs and may never be able to find anything better than what they are already getting. In fact, many may lose their jobs. This is where the value of R3500 will be highly appreciated.
So there you have it.
But, what’s your take on the minimum wage? Do you think it’s fair? Should it be more or less? We’d love to hear from you.