The new National Minimum Wage for South Africa has been issued by the Department of Employment and Labour.
The annual increase in the minimum wage will be 9.62%, making it R25.42 (up R2.23 from R23.19 before).
Both domestic and farm laborers will get a minimum wage in accordance with the rate. Workers hired under larger public works programs, however, will be paid R13.97 less per hour.
Domestic workers in South Africa should receive a 9.6% pay raise as a result of the increased minimum wage. Based on an 8-hour workday, the domestic worker’s monthly salary (160 hours a month) should rise by R400, from about R3,700 to R4,100.
The majority of minimum-wage employees, however, will see their pay rise to R1,144 per week (45 hours) or R4,957 per month, according to the government (195 hours).
The minimum wage hike turned out to be more than anticipated.
The agency had anticipated a rise of almost 8%, which was somewhat higher than the CPI, which has been over 7% for the preceding few months before barely falling to 6.9% in January.
In 2023, the CPI is anticipated to fluctuate between 5% and 6%.
Even if the national minimum wage increased above inflation, South Africa’s poor workers are still anticipated to experience substantial price pressure this year.
Bread and cereals registered the highest rate in January (21.8%) out of all the product groupings in the CPI basket. This is the highest reading for this category since February 2009 (23.8%) and increased from 20.6% in December.
Pastry goods (pizzas and pies), which climbed by 3,6% in January, maize, which increased by 3.1%, and brown bread, which increased by 1.3%, are among the bread and cereal items that had substantial monthly rises.
From 9.7% in December, meat inflation jumped to 11.2% in January. The most heavily weighted meat item, individually quick frozen (IQF) chicken parts, had a 2.7% monthly price rise between December and January.
These essentials all cost far more than the increase in the minimum wage.
A healthy basket of food costs a household over R4,900 per month, or R800 more than the new monthly minimum, according to statistics from the Pietermaritzburg Economic Justice and Dignity organization, which represents lower-income households.
This is without taking into account additional necessities like toiletries, transportation, and power.
Another significant issue is the price of power, with the energy regulator Nersa having approved an 18.65% increase in electricity bills for Eskom direct consumers beginning on April 1, 2023, with even bigger increases anticipated from municipalities beginning on July 1, 2023.