Wage equality
SOUTH AFRICA IS CONSIDERING INTRODUCING A MINIMUM SALARY
He works in AIDS prevention and his wife gets the occasional gig at a local supermarket. But neither job is regular enough for a “proper home”, Zwai Lugogo says, so his family lives in a shack here in Cape Town’s largest black township, making do with thin walls of painted metal.
Many of his neighbours — housekeepers, factory workers, nurse’s aides — are in the same predicament, working hard at jobs available to black South Africans, but barely scraping by.
“That money that we’re getting from work is just not enough to be able to take care of our families,” said Lugogo, 34, as neighbourhood children, including his threeyear-old son, ran around their narrow street recently. “We need an intervention.” South Africa is now considering one. Faced with rising discontent over the economy among black voters, the government is weighing something more common in developed economies: a national minimum wage.
Late last year, a government panel recommended about $260 (Dh954) a month, or about $1.50 an hour — a small amount even in South Africa, but close to the median income in a country where the official unemployment rate is 27 per cent and nearly half the population lives in poverty.
Last week, the nation’s deputy president, Cyril Ramaphosa, endorsed the panel’s recommendation, vowing that the minimum wage would be in effect by May 2018. But in such a sluggish economy, opponents contend that the effort would destroy jobs, especially for the least skilled.
Great Divide
Supporters counter that a minimum wage is the only way to reduce poverty in one of the world’s most unequal societies, helping to dismantle an apartheid-era system designed to provide cheap black labour for an economy dominated by the white minority.
In few places do divisions run as deep as in South Africa. Wealthy communities with living standards equal to those in the West and inhabited disproportionately by whites rub shoulders uneasily with desperately poor townships. A government survey released in January found that black South Africans, who make up 80 per cent of the population, earned only one-fifth of what whites did in 2015.
Some smaller African economies, like those of Cameroon, Ghana and Ivory Coast, already have a national minimum wage. But only a small percentage of their workers are in the formal economy and therefore eligible for the minimum, experts say. And even for them, the rules tend not to be enforced.
A national minimum wage would be more meaningful in a big economy like South Africa’s, experts say, because the formal workforce is much larger, around 80 per cent of all workers. Millions of people would be eligible.
Still, South Africa, subSaharan Africa’s most advanced economy, is enduring the same forces as the rest of the continent. It is not growing fast enough to absorb its rapidly growing population, which is leaving rural areas to look for work in places like Khayelitsha, one of the country’s biggest townships with about 400,000 people.
There is added urgency for the government to act: The African National Congress (ANC), which helped liberate black South Africans from white-minority rule and has governed the country since 1994, is still stinging from losing most of the nation’s biggest cities in elections last July.
The party could once bank on loyal support from the nation’s black majority. But corruption and economic stagnation for millions of people has steadily eroded that support over the years, resulting in the party’s worst showing in elections since the end of apartheid in 1994.
Out for all to see
The frustrations are evident in Khayelitsha. It is roughly situated between two of South Africa’s richest areas: the city of Cape Town and the famed wine country of Stellenbosch. Established in 1983 by the apartheid government, Khayelitsha, which means new home in Xhosa, still provides many of the workers for both communities.
On weekday mornings, soon after daybreak, the men and women of Khayelitsha leave their neighbourhoods and walk to the nearest train or bus station. For many, the commute — a legacy of apartheid-era urban planning to separate white and black areas — takes up to a couple of hours each way.
Many on Lugogo’s street, known as Twecu Crescent, said their commute cost them a quarter or a third of their monthly wages. For black South Africans nationwide, the cost of taxis, buses and other passenger road transportation accounts for 5.4 per cent of their expenses, compared with 0.2 per cent for whites, who tend to own cars.
Sitting near the front of a bus next to a window, Makatiso Sekhamane moved her lips while knitting a black cap.
“I knit whenever I have some free time,” Sekhamane, 47, said, explaining that she usually completed a cap in two days and sold it for about $4. “It’s something.”
The caps supplemented the $400 a month she made working six days a week cleaning white people’s homes. Her husband earned maybe $150 repairing refrigerators. Their combined income supports five children and two grandchildren at home.
Much of the discussion surrounding a national minimum wage — led by government, business, labour and academics — is expected to focus on the amount. According to the panel’s report, a monthly minimum wage of about $260 “would maximise benefits to the poor and minimise any possible” disincentives to work.
The amount proposed by the panel is below the working poverty line of $325 a month, but because the median income of South African workers is only $280 a month, the minimum would help reduce inequality, the panel said.
On Twecu Crescent, many of the employed already earn the proposed minimum, or more. But their wages are far below the salaries earned by the few residents in the nicest homes — $600 a month for a government worker, $900 a month for a young police officer.
The proposed minimum “is not enough”, said Nombeko Mndangaso, who earns about $165 a month working five hours a day as a cleaner in a nursing home. “It won’t make a difference.”
With her husband, who makes $245 a month as a fulltime security guard, they earn more than $400 a month. But with rent, transportation, electricity and two daughters, there is little left at the end of the month. A minimum wage of “at least” $340 a month per person, she said, would improve her family’s situation.
Haves and have-nots
Sparsely populated a generation ago, Twecu Crescent now has little or no space between homes. Many homeowners earn extra income by renting out shacks on their property to the endless stream of new arrivals to Khayelitsha.
On Twecu Crescent, a short street divided into two blocks, the handful of sturdily built homes belonging to the upwardly mobile stand out. There is, in a two-storey house, the woman who works at a bank; down the street, the man employed by the government power utility; and, on the corner, the police officer whose still unfinished house has a new red Peugeot in the driveway.
The street is otherwise lined with more modest homes under corrugated roof sheets, inhabited by those making a third or half of what those in the nicer homes do, and shacks of varying quality occupied by those worse off. Discoloured concrete blocks are neatly piled in many front yards, a sign of the slow and unsteady pace of progress for most on Twecu Crescent.
Sinovuyo Gada’s family moved here in 1998. “There was no road here, just gravel,” she said. “There were no houses, just shacks.”
Gada, 22, is part of the “born-free” generation of black South Africans who came of age after apartheid’s fall. But like many in her cohort, she was deeply dissatisfied with the pace of change in her family’s circumstances. “The apartheid, it’s still there,” she said.