Tag: pay

SA’s gender pay gap shrinks dramatically

By Carol Paton for Business Day 

The gender pay gap has shrunk dramatically, especially among low paid workers since the end of apartheid, but women at the top still face discrimination, a study by a University of Cape Town researcher has found.

In 1997, at the bottom end of the earnings spectrum, men earned 60% more than women. By 2014 this had diminished to 7%, said economist Jacqueline Mosomi in a paper based on her PhD thesis, published by the UN’s University World Institute for Development Economics Research.

The change is mostly attributable to the implementation of new minimum wages. Minimum wages for domestic and farm workers were introduced in November 2002. Women have also had better access to education since democracy, and marriage and fertility rates have declined.

“In general, in SA gender wage inequality was high because there were more women in low-paying occupations. There has been a substantial decline due to the implementation of minimum wages,” said Mosomi.

But at the top, despite having more years of education than men, women remain under-represented at senior levels and occupy jobs that are lower-paying. Mosomi’s paper found that more affluent and educated women were big beneficiaries of employment equity legislation and the gender wage gap dropped sharply from 48% in 1993 reaching 18% in 2014.

The Employment Equity Act, which requires companies to submit plans to the department of labour to bring the workforce in line with demographic categories, was passed in 1998.

“Women who already had high-quality skills were able to benefit from employment equity legislation but once that effect had taken place, the trend began to reverse. Now, even though women have more education than men they receive lower returns,” she says.

Mosomi says that the wage gap at the top does indicate discrimination but is also due to the type of work women do, which is often more administrative and less technical than occupations dominated by men.

Women in the middle of the earnings spectrum have benefited least in the post-apartheid era. At the mean — that is the half-way point in the wage distribution spectrum — the gender wage gap has hardly shifted. Men still earn 23% to 35% more than women. Mosomi says that other research has found that most occupations that fall into the median earning still tend to be male-dominated.

These jobs include elementary, service, craft or operational work. Gender analysis has shown that these occupations and the industries in which they are located are still dominated by men.

At the Jobs Summit held last October, Business Unity SA (Busa) undertook to encourage its members to voluntarily disclose the gap between the top and bottom paid as well as the gender pay gap. Busa said it would do this with a view to making disclosure compulsory over the next 12 months.

By Ben Roberts, Prof Sharlene Swartz and Dr Adam Cooper for the HSRC

The current recommendation for a minimum wage of R3 500 for South Africans is far too little. It should be at least twice that. In addition, we should also legally cap the income of company executives.

This is according to the majority of people who participated in the HSRC’s most recent social attitudes survey. They responded to questions related to a minimum wage and whether there should be a limit to what company heads could earn. These questions were included as part of the HSRC’s ongoing work into issues of poverty, inequality and restitution.

Income inequality has grown in post-apartheid South Africa, as the democratic period has brought with it greater disparities in earnings between a small, increasingly deracialised affluent group and the poor Black majority. This has been shown by Prof Murray Leibbrandt and his colleagues at the Poverty and Inequality Initiative at the University of Cape Town who describe a shift in the Gini-coefficient, a measure of income inequality, from 0.6 in 1993 to 0.7 in 2008. According to Leibbrandt and colleagues, wage income is responsible for 85% of income inequality with the labour market playing the defining role in ongoing income differences.

To test how the South African public feels about these differences in wage earnings, questions on the topic were included in the 2017 edition of the annual South African Social Attitudes Survey (SASAS). SASAS is a nationally representative sample survey of adults aged 16 and older that investigates public opinion in the country. The long-term aim of this survey programme is to construct an empirical evidence base that will enable analysts to track and explain the attitudes, values, beliefs and behaviour patterns of the country’s diverse populations by age, sex, population group, educational attainment, province, geographic subtype and class.

The survey questions explored South Africans’ perceptions regarding appropriate legislative interventions in labour market rewards aimed at both the top and bottom end of the income continuum. Specifically, the questions probed what respondents thought were appropriate minimum wages for workers and whether remuneration of corporate executives should be restricted. The participants were asked:

“What do you think is a fair minimum amount that all South African workers should earn each month? (No worker should earn less than this a month).

and

“To what extent do you agree or disagree that a law should be introduced in South Africa that limits the amount that a person in charge of a large national company can earn?”.

Minimum wage is too low
Results showed that South Africans believe that a mean figure of R6,953 per month is an appropriate minimum amount, substantially more than the R3,500 for a 40-hour week proposed in the National Minimum Wage Bill. Differences between sub-populations within the sample were noteworthy, with figures ranging from rural farm dwellers believing R5,707 to be adequate, in comparison to R9,678 for students and R10,121 among adolescents.

Top-end wages should be capped
Opinions about executive pay were recorded on a five-point scale (ranging from ‘strongly agree’ that a law should be introduced to limit earnings to ‘strongly disagree’). In total, 53% of the participants agreed that executive pay should be limited, 15% disagreed, 22% remained neutral and 11% were uncertain of the appropriate course of action or did not answer the question. Interesting differences between attitudes of sub-groups also emerged from this question, as Black Africans displayed greater support for limiting executive pay, in comparison to White and Indian adults. More unemployed people favoured income restrictions than employed respondents, as did young people in comparison to those over 50 years old.

Results showed that South Africans believe that a mean figure of R6,953 per month is an appropriate minimum amount, substantially more than the R3,500 for a 40-hour week proposed in the National Minimum Wage Bill. Differences between sub-populations within the sample were noteworthy, with figures ranging from rural farm dwellers believing R5,707 to be adequate, in comparison to R9,678 for students and R10,121 among adolescents.

Opinions about executive pay were recorded on a five-point scale (ranging from ‘strongly agree’ that a law should be introduced to limit earnings to ‘strongly disagree’). In total, 53% of the participants agreed that executive pay should be limited, 15% disagreed, 22% remained neutral and 11% were uncertain of the appropriate course of action or did not answer the question. Interesting differences between attitudes of sub-groups also emerged from this question, as Black Africans displayed greater support for limiting executive pay, in comparison to White and Indian adults. More unemployed people favoured income restrictions than employed respondents, as did young people in comparison to those over 50 years old.

Source: Business Tech

The results resonate with data from elsewhere in the world – for example in the US, between half and three-fifths of Americans concur with this kind of regulatory policy. Populations in the highly unequal societies of South Africa and the US therefore agree that measures to restrict corporate salaries should be introduced.

The survey results indicate that the public is astutely aware of existing wage disparities and favours courses of action to reduce these differentials. This was true both at the top end, in terms of executive pay, and for attitudes towards those most vulnerable in our society, people who receive very low wages. At the very least, the minimum wage should be closer to R40 per hour according to the South African public. Importantly, these findings were consistent across the class spectrum, suggesting that a broad consensus exists in relation to this issue, one that can only function to bolster the South African democracy.

 

COSATU has announced a one day national strike for all employees on Friday, 7 October 2016.

NEDLAC has confirmed that COSATU has complied with s77 of the Labour Relations Act, No 66 of 1995 (LRA) in serving the necessary notices on NEDLAC. The activities on 7 October 2016 will therefore constitute protected protest action and will not be a strike, despite COSATU calling it such.

Similarly, the activities on 7 October 2015 were called a national strike but were in fact protected protest action.

Section 77 of the LRA provides for “protest action to promote or defend socio-economic interests of workers” and covers a much larger scope of demands than those of mutual interest between employee and employer.

The demands that COSATU wishes to “fight for” are:
• “Demand the total banning of the labour brokers;
• Demand the scrapping of the e-tolling system including the expensive toll gates;
• Fight in defence of our Jobs and against retrenchments;
• Demand the implementation of the Legislated National Minimum Wage;
• Fight to defend and protect our Collective Bargaining Agreements;
• Fight for compliance with Occupational Health and Safety Standards in all workplaces;
• Fight for the implementation of the NHI;
• Fight for the scrapping of the Taxation Amendment Law; and
• Demand the implementation of Free Education.”

Any employee is entitled to participate in the protected protest action and may not be disciplined for being absent from work. Participating employees enjoy the same protection as in the case of a protected strike. However, the principle of no-work-no-pay will apply.

Any employee engaged in an essential service may not participate in the protest action. Employees in a maintenance service may participate if permitted by the agreement regulating the maintenance service.

It is not yet clear whether any of the non-COSATU unions will take part in the protest action organised by COSATU.
It is also not clear how widespread the protest action will be. Some of the COSATU regions have already indicated that they will support the project.

By Faan Coetzee and Samantha Coetzer, Cliffe Dekker Hofmeyr

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