Wage gap closing, union study finds

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, semi-skilled 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 lowest-skilled 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 semi-skilled workers improved from just below a third of the skilled grade to 44% of the skilled trade in the motor industry.

In effect, this means that the unskilled person now has less of a wage gap in relative terms than the semi-skilled 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.

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 bargaining councils surpassed the R3 500 level, on average, in 2011, he said.

Sectoral determinations were not yet there, mainly affecting domestic, farm, forestry, security and taxi workers.

As inequality continued to rise in the country, it was reported that the researched sectors had decreased workplace inequality.

The study remarks on the oddity that is South Africa’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”, Schussler said.

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

All government policies needed to have a common focus on employment creation to pull in the more than nine million people outside the labour market, Schussler said. — BDLive