Despite lingering arguments by labour unions that the average South African worker remains underpaid, South African minimum wages are likely to fall within the top 30% of global minimum wages in purchase power parity (PPP) terms and in the top half in nominal dollar terms worldwide, a report by union UASA has highlighted.

Moreover, the UASA 2015 South African Employment Report held that South Africa fared better than its Brazil, Russia, India, China and South Africa, or Brics, grouping counterparts in terms of the comparative minimum wage across several sectors.

“When compared with emerging market countries, South African minimum wages fall mainly in the upper ranges. On a PPP basis, even domestic workers get a minimum wage similar to that of China, while gold miners earn a minimum wage that compares favourably with Poland, Turkey, Japan, Spain and Israel.

“Compared with richer countries such as Australia and Germany, South African minimum wages lag behind somewhat, but in the government and mining sectors we are not too far behind the US,” economist Mike Schüssler said at the launch of the report on Thursday.

Moreover, South African minimum wages excluded overtime payments, staying out allowances, pension and medical fund payments, housing allowances and in-kind payments.

According to Schüssler, 84.5% of South African workers received a regular wage or salary, rendering more workers covered by minimum wages in South Africa than in most countries.

He added that, while South Africa did not have an overarching minimum wage across all sectors, a minimum wage for each industry had been traditionally determined through the country’s established collective bargaining system, with close to 75% of industries covered by these agreements.

“South Africa, therefore, does not have a single minimum wage, but several, as most formal sector workers are covered by either bargaining council minimum wages or by sectoral determinations as set by the Labour Minister. Very few people outside of the informal sector are not covered by minimum wages.

“There is probably very little needed for a national minimum wage as the system already allows the Labour Minister to intervene for weaker workers. A national minimum wage could well be an overkill and make some bargaining councils irrelevant,” he cautioned.

When comparing minimum wages on a global scale, Schüssler believed the most accurate calculations could be made when wages where depicted as a ratio of gross domestic product (GDP) per capita. 

“[When measured in this way, we deduce that] a South African miner earns more than twice the per capita GDP income share compared to miners in India or Brazil, while the minimum wage for government employees is six times the ratio of Russia’s minimum wage,” he averred.

The report, meanwhile, found that 155 of 209 countries had a national or regional minimum wage, while 41 States did not have an overarching minimum wage but rather offered sectoral minimum wages, like South Africa.

Around 52% of those countries with a minimum wage did not amend the wage on a yearly basis.

Data from other countries had also suggested that minimum wages that had been set too high could lead to many people remaining excluded from the regular wage economy and the formal sector.

“Remember that just wishing for high minimum wages and plucking them out of the air can lead to damage in the labour market and a country such as South Africa, which has an extremely high unemployment rate. The risks are huge, both for the economy and for the politics of the country,” noted Schüssler.