‘Vast majority’ of SA’s blue collar workers becoming poorer amid food price surge – report

  • Some 65 companies surveyed by rewards management platform Remchannel plan wage increases of 4% to 6% in the next 12 months.
  • This includes government organisations, which could be skewing the numbers upwards.
  • These planned increases are significantly below the general and food inflation in the past year.

Even though food prices in March were 14% higher than they were at the same time last year, most South Africans can expect their salaries to go up by less than half of that over the next 12 months, according to management platform Remchannel’s latest pay survey.

Most employers expect to award wage increases of 4% to 6%, according Remchannel’s biannual Salary and Wage Movement Survey Report released on Wednesday, which is based on data submitted by 65 organisations with nearly 350 000 employees. 

They represented a broad cross-section of companies, more than a quarter of which are listed. Remchannel also polled quasi-government and government sectors, which might have skewed the numbers upwards.

The majority of trade unions in the Public Sector Coordinating Bargaining Chamber (PSCBC) signed a public wage deal of 7.5% for 2023/24 and a CPI-linked wage increase for 2024/25.

“Invariably, South African households are under pressure with the vast majority of ‘blue-collar’ employees becoming poorer,” Remchannel’s MD René Richter said in a statement.

“If households want to climb out of this rut and gain more wealth, their income must increase at least by more than the consumer price inflation (CPI) rate.” 

Taking the public wage deal out of the equation means that most of the surveyed companies’ planned increases are even lower than the general inflation rate, which increased to 7.1% in March. This means those receiving a 4% increase would see their real pay fall by about 3%.

Richter said employees are already taking financial strain as salaries have not been keeping up with the increased costs of living for years. Furthermore, employees face increased costs associated with alternative energy supplies like inverters and home solar panel installations due to the escalating nature of load shedding.

But companies are also battling those rising expenses, affecting their production costs, revenues and profitability. Richter said they responded by tightening their belts, thus the adverse impact on salary increases. But because of the scarcity of some skills in SA, those possessing them, especially previously disadvantaged individuals, can still attract premium salary increases.

The employee turnover portion of the survey showed that 44% of staff resigned because of better career prospects and higher remuneration. Overall, labour turnover in these companies averaged 16.6%, with almost half (41.22%) attributed to resignations. Only 9% resigned citing a toxic workplace, much lower than last year, when 17% left because of a toxic workplace. 

https://www.news24.com/fin24/economy/vast-majority-of-sas-blue-collar-workers-becoming-poorer-amid-food-price-surge-report-20230426

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