With it being Equal Pay Day this month, it is only appropriate for businesses to ask themselves how they can address inequality in terms of salaries and wages. Wage inequality tends to be worse in third world countries than anywhere else. As Anton Rupert once said “You can’t sleep well if your neighbour is hungry”. By addressing wage inequality, businesses are effectively creating a more stable society for all.
Although our new national minimum wage of R20 per hour strives to address the issue of wage inequality, it is extremely low. R20 per hour equates to a monthly wage of R3,520 per month. Is it possible for anyone to truly survive on this?
Businesses should have a two-pronged approach when it comes to addressing this wage inequality. Firstly, they should have their own “internal minimum wage strategy” whereby they set themselves a minimum wage goal for their business (regardless of what job the person does) that should be achieved in a certain time period e.g. three years. They can then calculate by how much they need to increase their “internal minimum wage” to achieve their goal e.g. It might boil down to increasing the internal minimum wage by 8% or 9% every year to achieve this goal. By doing this, it breaks down the minimum wage challenge into more digestible pieces. I am involved in a business where we employ unskilled labour and where we set ourselves an internal minimum wage goal of R6,200 per month. We managed to achieve this goal in 3 years by increasing wages by a few percentage points more than inflation for the last 3 years.
The second part of the strategy should be about educating and uplifting your unskilled workforce to enable them to earn more in the future. This will give them the ability (and hope) that they can earn substantially more than the internal minimum wage, if they are willing to learn new skills. It might even mean that they eventually leave your business and apply these skills elsewhere.