A wage to fuel the fires of discontent

Posted on October 14, 2017


Fuel prices in South Africa went up again last week with hardly a whisper of comment. Perhaps we have become inured to such economic pain. Or perhaps, like some media houses, we misread the latest statistics, a good example of why the expression, lies, damned lies and then statistics remains current.

The latest figures from the country’s statistician general — quoted in some “sunshine news” items — reflect the change in prices from January to August when there was a relative fall from a high cost base. But since August the price of petrol has risen by 82 cents a litre, diesel by R1.06 and paraffin by 29.5 cents, surpassing the price levels for January.

So the fuel price rise does amount to pain as it will again adversely affect every wage earner — and increase the desperation among the millions of unemployed: fuel prices rises feed fairly quickly into the overall economy.

The effect is usually felt fairly rapidly in fares for minibus taxis that are the country’s major means of commuter transport. And, as commuters legitmately grumble: once fares go up, they seldom, if ever, come down.

Because food is trucked from place to place, the increased cost of (usually) diesel is passed on. The consumer ultimately pays. And there are regional differences: the ongoing drought in the Western Cape, for example, means generally higher prices for vegetables in that region.

Paraffin also remains a major source for heating and cooking in rural areas and in informal settlements. As a result, poor families, using paraffin to cook, are hit at least twice: for the cooking and any rise in the price of food even if the official inflation rate (CPI) is lower this month or year than last.

There will always be debates about how much a fuel price rise will affect different sectors of the population. But what is certain is that it will adversely affect the disposable income of every family, although in disproportionate ways.

A good example is in a wage gap in municipal pay. A worker carrying out the dirty, smelly and essential labour of rubbish collection, for example, earns, on average, R72 000 a year while a “white collar” councillor is paid between R450 000 and R830 000. Herein lies one of the reasons for the vicious inner party battles currently underway in several regions where assassination has become almost a norm. However, that is a separate issue although it, too, is a reflection of economic desperation.

Those men and women fortunate to have jobs and who will suffer the most pain through price rises will be in the low paid areas such workers in the domestic, farm, and forestry sectors along with those who labour in the hospitality industry. In the hospitality and domestic sectors in particular, there is a great deal of part-time work, but even for those individuals employed for a 45-hour week, pay rates are often well below any estimated poverty line.

Wages in these sectors are set by ministerial determination and, in recent years, have been based on the official inflation rate plus 1% or up to 2.5% ostensibly to make up for the historic lag in pay. However, the quoted, national, inflation rate varies from region to region and between urban and rural areas. And, as this column has frequently pointed out, official inflation is invariably much lower than the rate experienced by the low paid because of their spending patterns.

The estimated 1 million domestic workers, for example, have, in nominal terms, improved their minimum wages by 8.5% over the past decade. But even on official calculations, this means only a 3% increase in real pay.

Today the minimum — in probably most cases where the law is observed, the actual — hourly rate for a domestic worker in a metropolitan area is R12.42 or R559 for a 45-hour week. This is scheduled to be adjusted by the current inflation rate plus 2.5% in December. If that rate is assessed at 6%, this will add just R205.92 to the R2,422.54 monthly pay of an urban domestic worker. Inflation may be assessed at less.

Farm and forestry workers are marginally better off and their next pay rise is scheduled for March when the government promises to introduce a national minimum wage of R3,500 a month. Currently, their minimum hourly pay rate is R15.39 or R138.52 for a nine-hour day, with weekly income set at R692.62 or R3,001.13 a month.

Minimum rates in the hospitality industry range between R16.36 to R18.25 an hour or R3,193 to R3,559 a month. These rates are scheduled to be increased by CPI plus 1.5% in July next year.

Against this background, it is easy to see why many in the domestic labour movement see the introduction of a R3,500 minimum wage as only helping to fuel the fires of discontent, even if this move brings the ministerially determined wages up to that level.