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5.5m earned below minimum wage in 2017

2019-02-11 09:00

Did the ANC get its facts straight in the party’s 2019 election manifestoWe check a selection of claims. 

Claim: More recently, we introduced unprecedented legislation in South African history – the national minimum wage – which will improve the wages of at least 6 million workers who are currently being paid below the national minimum wage level of R20 an hour.

When the advisory panel on the national minimum wage considered the appropriate level for such a wage, it found that 6.2 million workers earned less than R3 500 a month, or R20 an hour.

It based its calculation on data from the 2014 Labour Market Dynamics in SA (LMDS) report and noted that this figure was an “overestimate” of workers earning less than R3 500 because it included workers who earned part-time salaries.

The LMDS report, which tracks labour market trends, is based on Stats SA’s Quarterly Labour Force Survey.

The most recent LMDS report was released in 2017. According to Stats SA, there were 5.5 million workers earning less than R3 500 a month in that year. This number includes part-time workers.

Possible impact

The National Minimum Wage Research Initiative at Wits University found that a national minimum wage – if set at an “appropriate and meaningful level” – could reduce poverty and inequality, while having a “minimal effect” on employment.

This conclusion was based, in part, on statistical modelling. Project coordinator and author of the research report Dr Gilad Isaacs said while the research was done in 2016 and the economy had since deteriorated, he would not expect dramatically different results if the exercise were to be repeated today.

Asked whether the current level of the national minimum wage was considered to be “appropriate and meaningful”, Isaacs said while it did not adequately “support bringing people out of poverty” because it had been set below the working poor line, it would have a large impact in terms of the number of workers affected.

The working poor are workers who earn less than R4 125 a month (at 2015 prices) and are unable to meet their and their dependants’ basic needs.

On a policy level, Isaacs said, concerns about the implementation of the national minimum wage included the fact that an annual increase was not guaranteed.

Verdict: Incorrect 

The claim that “at least 6 million” workers will benefit from the minimum wage of R20 an hour is incorrect. It is based on outdated data. The latest data show that 5.5 million workers earned below this amount in 2017.

The ANC did provide responses to our questions about the sources of claims in its manifesto, but the party did not make use of an opportunity to comment on our findings.

  • This package is part of a journalism partnership with Africa Check, the continent’s leading fact-checking organisation. The project aims to ensure that claims made by those in charge of state resources and of delivering essential services are factually correct. In the run-up to this year’s national and provincial elections, it is increasingly important that voters are able to make informed decisions.

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May 19 2019