Do 60% of South African workers earn less than R5,000 a month?

The Congress of South African Trade Unions (COSATU) claimed that 60% of workers in South Africa earn no more than R5,000 a month. Is the ANC alliance partner right?

Calling on “Big Business” to take discussions on a national minimum wage seriously, the Congress of South African Trade Unions (COSATU) last month highlighted worker salaries.

National spokesman Sizwe Pamla said that there was “an increase in the rate of the working poor”, adding that more than 60% of South Africa workers receive a salary of less than R5,000 per month.

Are earnings in South Africa that low? Africa Check looked into it.

Federation’s data from Stats SA

Asked for the source of the statistic, spokesman Pamla referred Africa Check to Statistics South Africa (Stats SA).

The statistics agency publishes an annual Labour Market Dynamics report that provides data on employment, the labour market and worker income in South Africa. The most recent one is for 2014.

Each Labour Market Dynamics report is compiled from the year’s Quarterly Labour Force Surveys, a nationally representative poll of “approximately 30,000 dwellings in which households reside” every three months.

Average salary of R3,033 per month in 2014

The 2014 Labour Market Dynamics showed that workers in South Africa earned on average R3,033 per month, the same as in 2013.

When the average for 60% of the workers in South Africa is calculated, it worked out to R4,200 a month, manager in the labour statistics unit at Stats SA, Monet Durieux, told Africa Check. This is less than in 2012 when 60% of workers earned R4,400 per month, and in 2013 when it was R4,333 per month.

Durieux explained that the decline is due to the increase in employment from 14.4 million to 15.1 million people between 2012 and 2014 while the average number of hours worked remained at 41 hours per week.

“This may suggest that people who found employment were less-skilled where earnings levels are lower. Thus the… middle of the earnings distribution would have declined,” Durieux said.

But high income may be underreported

What must be kept in mind though is that the Quarterly Labour Force Surveys are subject to underreporting, mostly at the higher income end. This Martin Wittenberg, an associate professor in the school of economics at the University of Cape Town whose research focus is labour economics among others, told Africa Check.

Durieux concurred that high-income earners do not always reveal their true earnings. However, she said Stats SA is confident that their surveys provide a good source of information on income distribution at the lower end of the scale, which can contribute to the national minimum wage debate.

But even considering an underreporting bias “the COSATU figure is certainly reasonable”, Wittenberg said.

Conclusion: Best available data shows COSATU’s figure is correct

Based on a compilation of their Quarterly Labour Force Surveys for 2014, Statistics South Africa estimated that 60% of workers in South Africa earned R4,200 a month then.

While the data may be affected by underreporting, the COSATU figure that 60% of workers earn less than R5,000 per month is seen as reasonable.

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