In a significant move, the Department of Employment and Labour Minister Thulas Mxesi has recently announced a substantial increase in South Africa’s minimum wage, with a notable impact on domestic workers. Effective from March 1, 2024, the minimum wage is set to rise from R25.42 per hour to R27.58, marking an 8.5% increase that surpasses the latest inflation rates, which averaged 6.0% in 2023.
This adjustment in the minimum wage also extends to domestic workers and farm workers, who will now be entitled to a minimum wage of R27.58. Workers involved in the expanded public sector programme will receive a minimum wage of R15.16 per hour.
When considering an 8-hour workday, this translates to a monthly wage increase for domestic workers (working 160 hours a month) from approximately R4,100 to just over R4,400 – a notable increase of R300.
However, the above-inflation increase in the minimum wage for domestic workers comes at a challenging time for employers, especially those within middle-class households. According to data from Eight20, middle-class households currently have a credit-instalments-to-monthly-income ratio of 73%, while the wealthiest 5% of the population carries a ratio of 61%. This data suggests that those most likely to employ domestic workers may find it challenging to accommodate additional costs in 2024, given the current financial constraints, high interest rates, and worsening real wages.
Despite the minimum wage hike, domestic services platform SweepSouth reports that the average domestic worker in South Africa earns less than R3,000 per month. Moreover, the group highlights the troubling trend of job losses within the domestic worker sector, citing economic troubles and increased emigration as contributing factors. Quarterly employment data from Stats SA reveals a significant decline in domestic worker jobs, with 250,000 job losses in the quarter following the start of the Covid-19 lockdown.
Although employment figures have shown signs of recovery in subsequent quarters, the sector has struggled to regain its footing. Four years later, the latest data indicates that approximately 150,000 domestic worker positions are still lost in the market, reflecting ongoing challenges in job restoration.
The economic difficulties faced by households, coupled with the historical loss of domestic worker jobs, underscores the complex landscape that both employers and employees navigate in the wake of the new minimum wage announcement. As South Africa strives for economic recovery, addressing the employment challenges within the domestic worker sector becomes a crucial aspect of fostering sustainable growth and ensuring fair labor practices.
