Durban - The cost-of-living crisis is hitting hard, leaving workers who earn the national minimum wage (NMW) of R25.42 an hour unable to afford the three core household expenses of transport, electricity and food.
This is according to the Household Affordability Index for September, which was released by the Pietermaritzburg Economic Justice and Dignity group.
The index looks at data from Durban, Johannesburg, Cape Town, Springbok and Pietermaritzburg.
The index revealed that the average worker receiving the minimum wage of R25.42 an hour in a 40-hour week, with a monthly wage of R4 067.20, is left with a shortfall of R1 837.13 after paying for transport and electricity.
It said that for this worker, a return trip to work using taxis cost on average R1 440, and by purchasing 350kWh of prepaid electricity worth R906.92, only R1 720.28 was left to secure all the other expenses.
Feeding a family of four would cost R3 557.41 leaving a shortfall of R1 837.13.
“The NMW set at such a low level does not allow workers and their families the possibility to secure even their most basic expenses.
“Instead it appears from the data that the NMW has worked to lock workers and their families into even deeper levels of poverty.
“Workers will have to cut back further on food and go into deeper levels of debt to cover wage shortfalls,” stated the report.
According to the findings, the high cost of core staple foods had resulted in a lot of proper nutritious food not being bought, which had a negative impact on overall household health and well-being, and child development.
The report further stated that the average cost of the Household Food Basket increased by R31.43 (0.6%), from R5 124.34 in August 2023 to R5 155.77 in September 2023.
The year-on-year comparison saw it increase by R349.91 (7.3%), from R4 805.86 in September 2022 to R5 155.77 this September.
Even if two people were earning the NMW in the household, making a combined income of R8 134.40, and the cost of food was covered, there were still other expenses that needed to be met.
The cost of the household domestic and personal hygiene products basket increased by R21.84 (2.2%) from R974.99 in August 2023 to R996.84 in September 2023, found the index.
“Domestic and personal hygiene products are critical expenses for safe hygiene and overall health and well-being.
“The money needed to secure domestic and personal hygiene products is sourced from within the food budget. These products compete viciously in the food budget,” read the report.
The index also found that the child support grant of R500 was set below the food poverty line of R760, and further below the average cost of R907.43 to secure a basic nutritious diet for a child in September 2023. The old-age grant was R2 080.
Evashnee Naidu, the KZN provincial director of Black Sash, said the human rights organisation was appalled at the cost-of-living crisis and its impact on those who were earning a minimum wage or on a social grant.
She said that while people needed more money each month to survive, this money was not available, as people did not earn a living wage, nor were social grant increases kept at an inflationary rate.
“Black Sash calls on the government to make the Social Relief of Distress R350 grant into permanent Basic Income Support, with effective and efficient administration to ensure that the poorest of the poor benefit and each household has access to some form of income that would allow people to live with dignity and to provide for themselves in a climate that is looking very bleak, and is making people more fearful about the future,” said Naidu.
Professor Bonke Dumisa, an independent economic analyst, said the national minimum wage was a contentious issue which has created a catch-22 situation.
Dumisa said that while workers needed more money to afford basic needs, if the minimum wage was increased, employers who could not afford it would be forced to reduce overhead costs by reducing staff or retrenching.
“They calculate if they can break even, and if they can’t they reduce overheads and fixed assets, and the first to go are staff,” he said.
In another example, he cited the increase in domestic workers’ hourly rate, which had resulted in employers letting their workers go or reducing the number of days worked.
The Department of Labour set the new minimum wage for full-time domestic workers at R25.42 an hour in March.
Dumisa said many people would beg for a R4 000 salary “if they can get it, because they are getting far less”.