TRACEY DAVIES: Ditch this dangerous mindset

A few months ago, a woman I know told me that when she first came to Cape Town from the Eastern Cape, she found a job as a housekeeper in the large home of a single man who ran an asset management firm. It was a full-time job, 8am to 5pm from Monday to Friday, and he paid her R750 a month.

This was about 10 years ago, so call it about R1,250 in today’s money. She took the job and accepted the salary, because she had no other options and was desperate to earn anything to support herself and her young son.

I was reminded of this when reading a July 5 Business Day editorial titled “Raising the Bar”. It heaps praise on listed companies Investec, Old Mutual and Santam for establishing minimum annual salaries of R250,000 (Investec) and R180,000 (Old Mutual and Santam), lauding this as a “beacon of progressive change”.

The editorial did not mention that these companies make extensive use of outsourcing, particularly for jobs that attract the lowest wages such as cleaning, catering and security services. Outsourced workers do not count as employees, and so most of those eligible for the minimum salary are likely to be entry-level graduates.

The editorial also did not mention that as soon as the president signs into law the 2023 Companies Amendment Bill, listed companies will have to disclose the salary of their lowest-paid employee.

Companies that have started to make this disclosure voluntarily are to be commended for doing so, but until it became clear to the corporate sector that its years of forceful lobbying against the bill would not succeed, JSE-listed companies refused point-blank to disclose the wages of their lowest-paid workers.

The Business Day editorial comments: “That is not to say R21,000 a month is enough for employees to support themselves and their extended families, but it is a step in the right direction in easing the financial strain that hampers wealth accumulation and social mobility for many black South Africans.”

If R21,000 a month is not enough “to support themselves and their extended families”, what then of the lowest-paid full-time workers at Shoprite, who earn about R5,000 a month, or the comparatively highly paid Woolworths employees at R7,200 a month?

There are many affluent South Africans whose view is that anyone with a job in this country is lucky to have one and they shouldn’t complain about the wages. But this attitude damages our chances of creating a more just and equitable society.

In a country where most of the population has never had any choice but to make do with almost nothing, and where the unemployment rate is so high, it is remarkably easy to exploit people. If you “create” jobs, you get a free pass on the conditions of those jobs and the wages you pay. 

And perhaps the creation by small businesses or individual employers of any employment, even for very little pay, is preferable to having no job at all for those who are desperate for work.

But why should this argument apply to multibillion-rand businesses which pay their executives tens or hundreds of millions of rand a year?

Overcoming inequality

Contrary to what you’ll hear from almost everyone in the financial sector, unemployment is not the sole cause of inequality. The labour market still strongly reflects the legacy of apartheid and remains a primary institution for transmitting and maintaining high levels of inequality.

Those earning very low wages are unable to afford anything other than basic goods and will never be able to improve their own or their families’ lot, let alone save for a rainy day. This damages the prospects of the whole economy.

We should not be congratulating listed companies for paying a fair wage. And we should stop accepting the argument that any pay is good pay, because this rationalisation underpins the accumulation of profit for the financial elite and is bad for everyone else.

Nobel prize-winning economist Joseph Stiglitz puts it best: “Much of the inequality at the top is associated with finance and the corporate sector. But it’s more than that: these leaders have helped shape our views about what is good economic policy, and unless and until we understand what is wrong with those views — and how, to too large an extent, they serve their interests at the expense of the rest — we won’t be able to reformulate policies to ensure a more equitable, more efficient, more dynamic economy.”

* Davies is executive director of Just Share