Work can and should be a reliable route out of poverty. However, for a growing number of South Africans that is no longer the reality as increasing factors are beginning to have a significant negative impact on their pockets.
Following an increase in interest rates and the cost of petrol and food as well as a possible rise in the cost of electricity, the average South African consumer is struggling to make ends meet - even if they work and earn a salary.
Hard work, it seems, is no longer a route out of poverty - ask any blue collar worker. Added to that South Africans are hugely indebted, and many say they live off credit as soon as five days after getting paid. For the poor who cannot easily access credit, this means they are taking out loans with exorbitant interest rates just to feed their families.
Mervyn Abrahams the Programme Coordinator for the Pietermaritzburg Economic Justice & Dignity Group (PMBEJD) believes the national minimum wage is no longer a sustainable route to keep starvation off the table.
“Workers go to work thinking they will be able to take care of their expenses but their wages are simply not enough.”
He says the top essentials South Africans need to take care of in their households are:
1. Transport
2. Electricity
3. Debt servicing
4. Food
Calculations, by PMBEJD’s January 2023 Household Affordability Index, show the national minimum wage was not enough to cover the needs of a family of four living in Pietermaritzburg for the month of January.
The National Minimum Wage is R23,19 an hour and R185,52 for an eight-hour day. For the month of January 2023 there were 21 working days which meant that the maximum that a general worker could earn in the month was R3 895,92.
Using the PMBEJD’s figures, the total cost of electricity and transport was R2 299,50 or 59% of the national minimum wage for the month. This meant that the family had just R1596,42 left over to take care of other expenses including food.
If all of the money left over, R1596,42, would be used to buy food for a family of four, the money available to each person would be R399,11 per person for the entire month which is 40% below the food poverty line of R663.
When the maximum wage of R3 895,92 in January 2023 is distributed between a family of four then the money available to each person was R973,98 which was below the upper-bound poverty line of R1 417 per capita per month.
In-work poverty is a reality for South Africa, as people continue to earn less money while there is a rise in costs.
Abrahams said wages are historically low in comparison to the cost of products and services.
According to the index, the national minimum wage is at such a low level that there is no room for even the possibility of workers and their families to secure their most basic expenses.
This means workers will have to do a further cut down on food and fall even deeper into debt to cover wage shortfalls.
“There needs to be an increase in the national minimum wage and a decrease in the cost of essentials in order for people to make ends meet,” Abrahams said.
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