Increase wages but what is a worker worth to a company?
Tips essential for low-income earners amid high cost of living
As SA continues to battle with rising costs of living, evident in the rise in labour protests in the second half of 2022, the debate about the value of wages in this economy is gaining momentum.
Mark Bussin, from the SA Reward Association (Sara), got the country engaged in a heated debate last week when he proposed that companies should consider paying workers a living wage between R12,000 to R15,000 a month. This figure, he says, is derived from careful consideration of how much it takes to sustain a family household in SA in this dire economic climate.
We are living under an energy crisis amplified by poor leadership, bad economic policy choices, declining foreign investments and a geopolitical war which have all resulted in high costs of electricity, fuel, food and transport among others.
These problems have dropped the buying power of people’s wages, especially those who survive on a minimum wage such as domestic workers, petrol attendants, waitrons, mine workers, contract interns and administrators, tellers and informal businesses, such as street vendors.
Bussin argues that if these workers, including skilled labour in the services sector such as call centre agents, salespeople, teachers and junior fieldworkers, could all earn above R12,000 a month, the companies could get more value from investments such as loyalty, a work ethic, decreased absenteeism, and even enthusiastic innovation.
There are many other reputable research institutions that have done similar studies with comparable outcomes, such as the Studies in Poverty and Inequality Institute (SPII) and PricewaterhouseCoopers (PwC).
The latter even adds further evidence to argue that for a person with a bigger family of six members inclusive of children, their living wages should be between R17,232 and R32,271.
Of course, these figures will awaken another debate – the “market rationality” behind such compensation levels compared to the primary value each worker adds to the actual company.
Put differently, if the primary mandate of a bank is to offer financial services to its clients, what then justifies it to pay R32,271 to a cleaner and a security guard, who are not its core staff? That debate will require another article.
But here are two key issues at play that SA should begin to consider. Firstly, SA has a strong tipping culture where we give a token of appreciation to the workers who offer us good service at petrol stations and restaurants.
These tips can range from as little as R5 up to R500. Most workers live on these tips, to boost their poor wages to survive the month.
Secondly, the modernity that came with Covid-19 was the severe decrease in the usage of coins and cash notes for payments. Consumers today use card machines and speed points to swipe for payments, including tips.
This method of payment sends the cash received from the entire transaction plus the tip to the pocket of the owner – not the worker. Many companies keep these tips as part of their revenue and give nothing to workers.
This is shameful exploitation. Tips come as a result of the emotional labour done by the worker to charm the consumer with decent, efficient service. That is creative work performed by the individual skill of the worker and compensation should be due to them.
Under this economic climate, companies must have integrity to take what is only due to them and give workers the rest of their money. The principle of the jungle, where companies steal a living wage from the sweat of workers, should be replaced with a culture of solidarity and goodwill where business owners seek to empower and enable workers to survive, live, thrive and feed their families.
This social responsibility on the side of the owner must be practised as a duty of care and humanity, especially in the name of the very same workers who help them make profits.
The UK parliament is proposing a tips bill to ensure tips are paid to workers in full. Our trade union movement in SA should develop the same urgency for workers to safeguard their rights and decent standards of living.