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CityPress - - Business - DEWALD VAN RENS­BURG dewald.vrens­burg@city­press.co.za

he long-promised na­tional min­i­mum wage rise is com­ing, with the busi­ness, labour and gov­ern­ment con­stituen­cies at Ned­lac ap­par­ently work­ing to­wards a deal in time for Pres­i­dent Ja­cob Zuma’s next state of the na­tion ad­dress. The re­search be­ing pro­duced for these talks is now be­ing made public, show­ing just how rev­o­lu­tion­ary a rel­a­tively high min­i­mum wage could be.

A min­i­mum wage even re­motely ap­proach­ing the lev­els con­sid­ered nec­es­sary to erad­i­cate poverty among work­ing peo­ple and their de­pen­dants would have to raise the wages of lit­er­ally mil­lions of peo­ple.

New re­search shows that if the wage were set at R4 500 a month, it would cover at least half of the em­ployed pop­u­la­tion, even af­ter any num­ber of con­ser­va­tive as­sump­tions about peo­ple un­der­re­port­ing their earn­ings – and ex­clud­ing part-time work­ers and, cru­cially, in­for­mal, do­mes­tic and farm work­ers.

If of­fi­cial labour fig­ures pro­duced by Stats SA are taken at face value, a min­i­mum wage of R3 200 would al­ready help half of South Africa’s work­ers.

But if the wage were to have any real im­pact on poverty, it would have to reach at least R4 125 a month, a level de­fined as the “work­ing poor” line. This takes into ac­count that many wage earn­ers in poor house­holds of­ten sup­port a large num­ber of de­pen­dants. It rep­re­sents the wage needed to move an av­er­age poor house­hold with one earner up to the poverty line of R1 319 per capita, enough to sup­ply the earner with 2 100Kcal in food a day and a min­i­mum of es­sen­tial items – a sub­sis­tence level of liv­ing.

Wage lev­els at the mo­ment mean nearly 90% of peo­ple em­ployed in the agri­cul­tural sec­tor and 95% in do­mes­tic ser­vices fall be­low the work­ing poor line, com­pared with just over 23% in the min­ing in­dus­try. The trade in­dus­try em­ploys the largest num­ber – 1.1 mil­lion – of the work­ing poor, with about 60% of work­ers earn­ing less than R4 125 per month. More than 20% of all work­ers who earn less than this thresh­old are em­ployed in the trade in­dus­try. More than 17% are in the ser­vices in­dus­try, which em­ploys about 945 000 work­ers.

Along racial lines, nearly 60% of African work­ers are part of the work­ing poor, com­pared with 56% of coloured work­ers and 22% of white work­ers.

While the min­i­mum wage has elicited both ex­treme op­po­si­tion and sup­port, it is al­most com­pletely mean­ing­less with­out some idea of the level at which it will be set – or some ba­sic de­sign is­sues be­ing sorted out.

The public dis­course on it is “not very ev­i­dence based”, says Gi­lad Isaacs, a re­searcher at the Wits Univer­sity’s cor­po­rate strat­egy and in­dus­trial de­vel­op­ment (CSID) re­search pro­gramme. The CSID, along with the Univer­sity of Cape Town (UCT), hosts two brains trusts work­ing on wage-re­lated re­search for Ned­lac, and this week started re­leas­ing the re­search they have been giv­ing de­ci­sion mak­ers.

Ar­den Finn from UCT’s labour de­vel­op­ment re­search unit pre­sented a pa­per on South Africa’s cur­rent wage struc­ture to jour­nal­ists, show­ing how much im­pact a min­i­mum wage would have at dif­fer­ent lev­els.

It shows that South Africa’s me­dian wage is roughly

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