Analysts from e-commerce company Picodi.com compared minimum wage rates from 64 countries, including South Africa, and analyzed whether the minimum rates are sufficient to guarantee a minimum standard of living in a given country.
The study covered countries where a minimum wage was set by the government, a total of 64 countries in Europe, North and South America, Africa, Asia and Australia. Picodi compared the monthly minimum wage for a full-time job in January 2022 with wages in January 2021. These rates come from official government websites, relevant ministries or committees.
These countries differ in the tax rate: in several countries, a person earning the national minimum wage is exempt from income tax and contributions (Hong Kong, Philippines, Nigeria), while in other countries, the difference between gross income and net income can be up to several tens of percent, according to the authors of the report.
For this reason, the list only includes net amounts, i.e. the money that the employee actually receives in cash or in his bank account.
Minimum wages around the world in 2022
South Africa sits in the middle of the standings in 36th place. The current national minimum wage is R21.69 per hour, and the Department of Labor has called for comment on a new minimum wage target for South Africa in 2022, at around R23 per hour. Depending on the number of hours (8-9) worked each day, a minimum hourly wage could attract between R3,400 and R3,900 per month.
Picodi puts the number at R3,555 per month, which he says will increase by 4.7% in 2022 to net R3,722.
For the purposes of this study, Picodi created a contractual list of basic food products and compared the prices of these products with the minimum wage.
The list consists of 8 product groups: bread, milk, eggs, rice, cheese, meat, fruit and vegetables. He noted that although the list is very limited, in the quantities indicated, these products are sufficient to meet the minimum nutritional requirements of the average adult.
- Milk (10 liters) – R162
- Bread (10 loaves of 500g each) – R142
- Rice (1.5 kg) – R33
- Eggs (20 pieces) – R50
- Cheese (1kg) – R112
- Poultry and beef (6 kg) – R550
- Fruit (6kg) – R137
- Vegetables (8 kg) – R154
The value of staple foods at the start of 2022 is R1,340. Compared to the start of 2021, product prices have increased by 2.84%, analysts note.
Can you live on the minimum wage in South Africa in 2022?
Staple foods sufficient to meet minimum nutritional requirements are worth 36% of the minimum wage. A year ago, these products were worth 36.7% of last year’s minimum wage. That means the minimum wage increase slightly outpaced the price increase, Picodi said.
“As food preferences and perceptions of a comfortable life vary from region to region, and even from person to person, we decided to compare the prices of basic groceries with the minimum wage to see how much of the minimum income a person should spend on necessary commodities,” the authors said.
Basic food costs
The first countries in this ranking are the United Kingdom, Ireland and Australia: the ratio of basic products to the minimum wage varies from 6.6% to 7.3%.
In this ranking, South Africa ranked 48th out of 64 countries with a result of 36%. Canada ranked 7th (9.8%), the United States — 13th (12.2%) and Malaysia — 45th (35.3%).
The situation of minimum wage earners in Russia, Kazakhstan or India is not easy: in these countries, the minimum cost of basic food products consumes about half of their salary. By contrast, in Nigeria, the minimum wage is not even sufficient for a modest basket of products.
Pietermaritzburg Economic Justice & Dignity Group’s (PMBEJD) latest Household Affordability Index in December showed food prices rose slightly in December 2021, to R4,275.94 for a basket.
Data from the Civil Society Initiative showed that year-on-year, however, basket prices rose 6.8%, outpacing headline inflation. The same basket in December 2020 was R4,002.42, meaning households are paying R273.52 more than a year ago.
The PMBEJD basket includes 44 basic food items most frequently purchased by low-income households, which make up most households in the country.
The group said its calculations for a worker employed full-time at the national minimum wage rate (R21.69 per hour or R3,644 per month), show that after securing transport and electricity (at an average total of R2,076: R1,344 for transport and R731.50 for electricity), a working family is left with only around R1,568.
Read: Higher minimum wage proposed for South Africa