Survey confirms that wages are falling - SAFTU

BankservAfrica's latest Take-home Pay Index finds that take home pay remains static

Survey confirms that wages are falling

The South African Federation of Trade Unions, which has been concerned and angry at workers’ falling living standards, has now been proved to be fully justified, with the revelation in BankservAfrica's latest Take-home Pay Index that take-home pay levels declined dramatically in May 2018:

“The average gross salary in May 2018 was R14 290 in current terms. Net take-home pay was R10 010. But when the gross salary is changed to constant 2016 money - to make comparison easier - it decreased to R13 621, some R290 less than in April 2018.

“The current typical wage increased by 2.8%, but after taking inflation into account, declined by 1.5%. The decline leaves take-home pay in constant terms at the same level as in December 2013".

The decline was likely to continue until July when the Public Service salary increase and back-pay comes into effect. That will not however mean any improvement for millions other workers in the private sector whose wages are falling.

Right-wing economist Mike Schüssler, in a comment about the BankservAfrica report, also confirms what SAFTU has been arguing - that lower wages are not just a burden on the low-paid workers and their families themselves but have a negative affect on the whole economy.

“The shrinking economy and low profit margins,” he says, “made large salary increases unlikely with employees feeling the impact of the burden of the current difficult times… As such May is likely to reflect badly not only for retailers but also for other sectors that rely on consumer spending.”

This is the same big pro-capitalist commentator who said in 2014 that the cause of high unemployment is “militant labour organisations making demands for ever increasing wages”, implying that higher wages increase unemployment and inequality. 

Yet now he is admitting that low wages reduce consumer spending and demand for goods and services and thus confirms SAFTU’s argument that falling incomes actually increase unemployment and inequality and slows down economic growth even further.

This latest BankservAfrica report provides further reasons for all workers, like those at Eskom, to keep fighting for higher real wage rises and for the rejection of the R12, R18, R15 and R11 poverty national minimum wages, which will still leave millions effectively excluded from the country’s economic life. 

SAFTU demands a living national minimum wage which will enable workers and their families to live in comfort and enjoy the benefits which middle-class South Africans take for granted - good education for their children, proper healthcare, holidays and pensions.

But it would also turn millions more of the poorest into consumers in the economy, which will increase demand and lead to more jobs and help to reverse the economic decline which is piling more misery on to the shoulder workers and the poor majority of South Africans.

This BankservAfrica report is likely to be another item of the agenda of the Working-Class Summit on 21-22 July 2018, which aims to unite civil society formations, employed and unemployed workers, those in the informal sector and in more secure work, the students and the landless, the homeless and those fighting against the water crisis and the scourge of violence against women and children, into a struggle for a truly free, democratic and equal society.

Its goal is to build a network with grassroots organsiations to fight back against the neoliberal attacks by monopoly capital and the ANC government, falling real wages, the VAT increase and e-tolls and for free education at all levels, proper service delivery and free healthcare under a proper funded national health insurance scheme. 

SAFTU is calling on all formations of the working class to attend and calls on all those interested in participating in a such conference to contact us.

Statement issued by Zwelinzima Vavi, SAFTU General Secretary, 29 June 2018