’Minimum wage has potential to bridge gap’

AFTER Deputy President Cyril Ramaphosa announced the proposed R3 500 minimum wage last Sunday, questions were asked about how one could realistically be expected to live on R3 500 a month.

“No one is saying that R3 500 is enough to live on. However, it is a step in the right direction,” said Gina Schoeman, an economist at Citi.

For a person who lives in Soweto and works in Sandton, commuting by taxi costs R51 a day, or R1 122 a month — almost a third of the proposed minimum wage.

If you add food, clothing and the need to provide for dependants, it’s clear that this is hardly sufficient.

Mamokgethi Molopyane, a labour analyst, said low wages that increased the gap between the haves and the have-nots exacerbated inequality and undermined social cohesion.

“Almost 50% of the adults who are full-time employees are called the ’working poor’, meaning their income is below R7 500.

“They cannot meet their basic needs, let alone their dependants’,” said Molopyane.

At the other end of the scale, South African executives are paid what some deem exorbitant salaries.

This month, a Bloomberg survey on executive salaries around the world ranked South Africa at No 7 in terms of the highest-paid CEOs. The CEOs of Top 40 JSE companies earn about $7.14-million (R100-million) a year. This includes salary, cash bonuses, deferred pay, pension, value of perquisites, and non-cash remuneration such as equity awards.

Molopyane said that while many in the private sector may say that the R3 500 minimum wage is not possible, it was essential to narrow the bridge between those who were paid the least and those who were paid the most.

“A minimum wage has the capacity to augment that bridge.” —