[ad_1]
Research and analysis group Intellidex has published a new report on the salary of public sector workers in South Africa,
The report, which was commissioned by Business Unity South Africa (BUSA), uses the same calculations as the IMF, which views the public sector as “general government.” This corresponds to the national and provincial public departments and entities of South Africa, but excludes local government and state enterprises.
Based on this consideration and data from Stats SA, the size of the public sector has increased by more than 18% between 2010 and 2020, from a little more than 1.8 million to a little less than 2.2 million.
Of these, about 50% are employed by provincial government departments and 21% by national government departments.
Intellidex’s shows that public servants have seen a steady increase in compensation since 2006/07, which has been driven by five factors:
- A one-time change in pay in 2008/09 when occupation-specific wage exemptions (OSD) were introduced for a wide range of more qualified civil servants (doctors, lawyers, nurses, teachers), with the introductions accompanied by one-time significant increases in salary basic;
- An expanded series of wage agreements in which the basic wage was adjusted at a rate higher than inflation;
- Cost-of-living adjustments are applied to wages paid at each of 16 salary levels in the public service, each of which is divided into several different levels. Over time, there has been a certain degree of inflation in the categories, which has led to an upward requalification of positions;
- A “level progression” system in which public servants are entitled to incremental increases in basic salary above the cost of living adjustment, provided they achieve a minimum score on their performance evaluation. In the past, different salary progression systems were applied in different parts of government, but the 2018 salary agreement provided that all public servants would qualify for a salary progression increase of 1.5% each year;
- Faster-than-inflation growth of non-wage labor benefits, especially health care and a number of benefits, the largest of which is the housing allowance to which all proprietary civil servants are entitled.
The combined effect is that these factors force an increase in average compensation faster than inflation, with an increase in average compensation adjusted for inflation of 44% in the last 12 years. from R272,000 in 2006/07 to 393,000 R in 2018/19, Intellidex said.
Intellidex said the increase in pay has been faster for officials with the lowest salary levels and has been progressively slower in the hierarchy.
“The result is a dramatic shift in the distribution of staff across various income levels,” he said.
“Using inflation-adjusted income bands, (there is a) decreasing proportion of staff earning less than R20,000 per month adjusted for inflation – from 85% of staff in 2006/07 to 48% in 2018/19 – and percentage of staff who earn above that figure.
The fastest growing income band consists of staff earning more than an inflation-adjusted monthly salary of R30,000, the number of which has increased fivefold in 12 years, he said.
“(There is) a twelve-fold increase in staff earning between R30,000 and R40,000 per month, and a five-fold increase in the number of employees earning more than R60,000 per month.”
Intellidex said the rise in higher earners in public service has been driven by a dramatic increase in the number of medical professionals, the vast majority of whom are physicians, rather than ordinary civil servants, administrators and legislators.
The latter’s population increased by 65% (4,700) between 2006/07 and 2018/19, but the number of medical personnel at the upper end of the income distribution in government has risen much more rapidly, from less than 5,000 in 2009/10. to more than 13,000 in 2018/19, it said.
Critically, the increase in payroll costs has outpaced the growth rate of the economy, with the result that these costs consume an increasing share of GDP, Intellidex said.
“The extent to which the pay increase has had an impact on the rest of the government budget is somewhat obscured by the Treasury’s habit of reflecting compensation as a part of total spending.
“While this has increased, the growth rate is slower than the growth rate of debt service costs,” he said.
Win more everyone
The previous wage increase must be considered alongside private sector wages and the current state of poverty in the country.
Stats SA the latest Quarterly employment survey (QES) for the second quarter of 2020 shows that the average monthly income paid to employees in the formal non-farm sector increased / decreased by 4.2% qoq.
The average worker receives a payment of R21,455 per month (slightly below R22,395 recorded in the first quarter of 2020), down from R21,796 in the same period in 2019. This equates to approximately R257,460 per year.
Bonuses and overtime paid to employees decreased by R16.4 billion (-26.2%) from R62.6 billion in March 2020 to R46.2 billion in June 2020.
Data from the latest version of the Pietermaritzburg Economic Justice & Dignity Group household affordability index shows that the majority of the country lives below the upper limit of the poverty line in South Africa, with millions surviving on subsidies:
- There are 12.78 million children receiving a child support grant (valued at R440 per month);
- There are 3.67 million pensioners who receive an Old Age Grant (valued at R110 per month);
- There are 30.4 million people (55.5% of the population) living below the upper limit of the poverty line of 1,268 rand per month;
- There are 13.8 million people (25.2% of the population) living below the food poverty line of R585 per month.
Read: Almost all government workers in South Africa earn more than the bottom 50% of taxpayers
[ad_2]
