The South African government at municipal, provincial and national level can change the state of the nation for the better by supporting employers to pay living wages.

A living wage can turn the tide of the country’s fortunes, bring peace and stability, promote equality and stimulate economic growth. Many employers believe they cannot afford to pay lowest paid employees decently – it is counter-intuitive to them that, in most cases, the commitment to lifting wages at the lowest level increases financial performance. As humans our decision are often driven by anxiety more than facts. Government could counter this fear through incentives to those who do pay living wages.

What is a living wage?

A living wage as sufficient income for an individual and their family to afford the basic necessities of life, have something over for savings, and be prepared for life’s emergencies.

This is in stark contrast to the current national minimum wage that is legislated but does not lift poverty. A living wage is more than an amount, it is an approach. Employers should adopt living wages voluntarily as it is a responsible business practice which promotes an organization’s financial sustainability and is morally right at the same time. While it is about affording dignity through fair wages, it needs to be accompanied by treating employees decently in all aspects of their work-life.

An instrument of peace

The 1919 Treaty of Versailles, Part XIII, Labour, recognised that universal peace could only be established on the basis of social justice. However, harsh labour conditions that deprive large groups of people of the essentials for their well-being could result in civil unrest and threaten this peace.

Among other solutions, the treaty emphasised “the provision of an adequate living wage” as a means to reduce that risk. It is a remedy South Africa needs now.

Driven by government

While the government need not legislate or enforce employer adoption, it must recognise the living wage as an essential instrument in the preservation of human dignity, social cohesion and civil stability.

It can also play a critical role in promoting and encouraging this initiative through campaigning, support programmes and incentives.

Here are a few ways in which government could support employers to pay living wages:

• As South Africa’s single largest employer, lead by example by becoming its foremost living wage employer at national, provincial and municipal levels.
• Leverage the State’s immense purchasing power by preferring contractors who pay living wages, thereby incentivising employers to do so.
• Encourage employers to embrace a living wage approach through payroll subsidies, incentive schemes or tax breaks.
• Give special attention to small businesses whose slim profits may dissuade them from offering a living wage by providing extended subsidies, allowances and tax incentives.
• Identify and implement sector-specific initiatives that help special-case employers transition more easily to a living wage scheme.
• Invest in living wage employers through skills development programmes that enhance their productivity, efficiencies and competitiveness.
• Reward organisations who work with living wage employers throughout their supply chain, thereby promoting peer-based auditing.
• Partner with organisations that gather, analyse and disseminate national data that helps employers set a fair living wage in their companies, industries or sectors.

Government actions like these not only alleviate companies’ worry that they cannot afford living wages but also a self-balancing system that preserves competition across the market.

True peace can only exist when all South Africans are lifted out of poverty, and the government can make this happen by supporting and assisting employers eager to adopt the living wage concept.

We invite the government, employers and any other interested parties to contact us for more insights about its benefits or partner with us on our journey towards a nationwide living wage implementation.

Ines Meyer is the Chairperson of the Living Wage South Africa Network and a Professor at the University of Cape Town. The Living Wage South Africa Network comprises about 80 individual, public, non-profit and local and international corporate organizations, is the primary source of information and expertise on this subject in South Africa.