Business Day

Wage gap closes between skilled and unskilled

- Theto Mahlakoana Political Writer /File picture mahlakoana­t@businessli­ve.co.za

The wages of workers in the bottom tier of the economy have increased substantia­lly over the past 20 years, an employment study by trade union Uasa has found.

The minimum wages of elementary workers have risen at a much faster rate than of those in middle and some senior management positions, it says.

A report on the study, released in Johannesbu­rg on Tuesday, shows that wage agreements between employers and unions generally outpaced inflation, closing the gap between skilled, semiskille­d and low-skilled workers.

“The first trend is that the wage gap between the skilled and the unskilled closed in most cases. For example, the lowestskil­led grades in the motor trade went from less than a fifth of the wage of a skilled grade to over a third between 1979 and 2017,” the report says.

Wages of semiskille­d workers improved from just below a third of the skilled grade to 44% of the skilled trade in the motor industry.

BENEFITS

In effect, this means that the unskilled person now has less of a wage gap in relative terms than the semiskille­d grade had in 1979, it says.

Some of the recorded benefits that have increased for workers are employer pension fund contributi­ons, increased leave days and family time. Economist Mike Schussler says the newly set minimum wage level of R3,500 a month was exceeded by most sectors years ago.

The research was conducted and presented by economist Mike Schussler, who noted that the majority of the sectors in the economy — including mining, metal and trade and the public service — exceeded the newly set minimum wage level of

R3,500 a month decades ago. Union-negotiated settlement­s in industry exceeded the R3,500 level in 2007, while private

The study remarks on the oddity that is SA’s unemployme­nt rate, which has been stuck at over 20% for two decades.

There was no other country in the largest 100 economies in the world that “has had more than two decades of unemployme­nt above 20% constantly”, said Schussler.

This was at crisis levels in SA as the real effect of the Gini coefficien­t was the result of unemployme­nt, which was directly linked to inequality and not low formal sector wages.

All government policies needed to have a common focus on employment creation in order to pull in the more than 9-million people who were now outside the labour market, Schussler said.

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Wage research:

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