Employers should pay their workers a living wage and not just the national minimum prescribed by law.

This is according to Dr Mark Bussin, Master Reward Specialist and Exco member of the South African Reward Association (SARA). "An employee's monthly pay should be at least R12,000 to R15,000 for a 40-hour work week," he says. 

Bussin defines a living wage as remuneration sufficient for an individual and their family to have a frugal yet dignified lifestyle. "Workers who earn the minimum wage often still cannot afford basic monthly essentials and are woefully unprepared for financial misfortunes, like roof repairs or hospitalisation," he says.

Business impact

What many employers don't realise is that financial distress among workers is bad for business.

The strain of not earning enough and constantly struggling to survive can negatively affect employees physically, emotionally and cognitively.

In an August 2013 Science journal article, researchers Mani, Mullainathan, Shafir and Zhao observed that a lack of money led study subjects to make poorer decisions. They hypothesised that poverty reduced focus and effort, resulting in inferior performance.

So the stress associated with financial hardship causes employees to make errors in judgement and inhibits their productivity. It also prevents them from reaching their full potential, increases absenteeism, and results in higher turnover rates.

"These effects can reduce business performance in the short term and hinder economic growth over time," warns Bussin. Replacing workers will not solve the problem if most of them face the same predicament.

Trapped in poverty

According to estimates from PwC, the University of Cape Town and the Tshwane University of Technology, the national minimum wage level for 2022 of R23,19 per hour is only around half to a third of the current living wage.