18 industries pay below ‘food secure’ salaries
MBABANE – The Inception Assessment Study towards the implementation of minimum wage shows that almost all 18 industries whose salaries are regulated through wages orders are paying below food secure salaries.
The study that was conducted through the assistance of the International Labour Organisation (ILO) country office for South Africa, Botswana, Lesotho, Eswatini and inclusive Labour Relation, as well as working conditions branch, provides a schematic overview of the economic and labour market context in which a new minimum wage policy will be developed.
Section 5 of the study findings drew a closer attention to the five minimum wages and the needs of workers and their families against the 2022/23 wages orders.
Section 5.3 of the study, under Assessment of Wage Order Minima categorised wages of the industries, in three ways.
Approach
In assessing the wage order minima, the study groups wages in thresholds used for low pay, as well as an estimate for the living wage based on an adapted version of the ‘Anker’s approach’. This approach requires adjusting the adult-equivalent national poverty line by the mean number of adult equivalents in a household. Ideally, the calculation should be based on the composition of poorer households. The study shows that three adults might require E3 668.85 living wage while one adult might require E1 183.5.
The study categorised the wages in low part threshold, median and food-secure thresholds.
The report that was subsequently produced by the team of experts, shows that the comparison between the lowest minimum wage specified the thresholds used for low-pay, and the living wage estimate. The inflation then adjusted food-secure threshold to E4 514, while the inflation-adjusted two thirds of the median was E1 747 per month.
This means for emaSwati, food security should at least be a minimum of not less than food-secure threshold of E4 514.
However, the figures that were obtained during the study showed all orders having a minimum far below the food-security that represents the level proposed by government, in its request to the ILO, as one that would avoid extreme food insecurity.
“All orders also have minima far below the median representing the living wage estimate,” reads the report.
Further, nine of the 18 orders have minimum less than the far less ambitious low pay, which is two thirds of the median wage cut-off.
The report also drew closer attention to the trade industry, which is paying far less ambitious cut-off, where women employees dominate quite clearly in the majority of the nine sectors failing this test.
Compliance
Furthermore, the study shows that motor trade has the lowest rate of compliance, while manufacturing, other than textiles, had very good compliance.
“Textile’s compliance rate is also relatively good, despite having a higher minimum wage than other manufacture. The minimum for the motor engineering trade is noticeably higher than the other industries, which may partly explain but not excuse the high rate of non-compliance.
“For all six selected industries combined, the compliance rate is 73 per cent, suggesting that more than a quarter of the employees were under paid, in legal terms.”
The report concludes by stating that an increase of only three per cent overall, would be needed for all workers to be paid at least two thirds of the median wage. Only three sectors – accommodation and food services, agriculture as well as education - would need increases of more than five per cent in the wage bill. To achieve a minimum at the Anker-adjusted level, the report showed that the wage bill would need to increase by just under a third (32 per cent). To achieve the government’s suggested minimum of E4 514, which is the food-secure, the wage bill would need to increase by nearly half (48 per cent).
Indicated
Furthermore, the study also indicated that the relationship between government and the social partners had not always been good.
“For example, the country’s biggest labour federation, TUCOSWA, was deregistered by the government in April 2012. Trade union protests have also been disrupted, sometimes by force, by government’s security forces.”
It shows that Eswatini took some steps to improve legislation that protects workers’ rights and comply with the international labour standards, but an addendum to the 2020 report of the ILO Committee of Experts on the Application of Conventions and Recommendations to the International Labour Conference of 2021, found that government’s actions were not always in line with legislation.