The South African Employment Report - Vol.7[1]

7/30/2019 The South African Employment Report - Vol.7[1]

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The 7th UASA Employment report.

economists.co.za


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The Big Company Survey. Salary increases and employment forecasts.

What determines your worth? Education.

Field of study. Population group. Age.

Area. Union membership. Own Business. Firm size.

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9.5%

8.5%

9.3%

7.3%

9.2%

11.8%

9.7%9.9%

5.0%

6.0%

7.0%

8.0%

9.0%

10.0%

11.0%

12.0%

13.0%

2003 2004 2005 2006 2007 2008 2009 2010

% Annual Salary Increases

economists.co.za


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The average big company salary is nowR13500 per month.

The average wage increase for 2007 was 9,2%- which was 2,7% higher than the averageCPIX for 2007.

We expect salary increases to average nearly12% this year, as higher inflation makes forhigh salary increases. Many wage agreements are CPIX plus 1% or 2%

plus productivity increases.

economists.co.za


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Employment growth slowed to 2,3% in 2007but is still positive. The 2005-6 highpoints of over 3,5% will be

difficult to achieve in the near future.

Salary strain on commission earners at present

In 2008 we believe that employment growthwill still be positive, but closer to 1,5% We are having difficulties due to the impact of

higher rates and the electricity crises - but theimpact is difficult to quantify

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0

500

1000

1500

2000

2500

3000

3500

4000

4500

5000

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Average minimum wages are just over R2500(including domestic workers) and over R2700

(excluding domestic workers).

The average increase of minimum wages was9,1% - slightly lower than overall big company

increases.

We expect Minimum wages to increase by over11% this year due to bargaining council and Unionwage contracts of CPIX plus increases.

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Education, population, province, firm size, etc.

Eight big factors that influence Pay

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0 100 200 300 400 500 600 700

No schooling

Grade 0

Grade 1

Grade 2

Grade 3

Grade 4Grade 5

Grade 6

Grade 7

Grade 8

Grade 9

Grade 10

Grade 11

MatricNTC l

NTC II

NTC III

Certificate with less than Grade 12

Diploma with less than Grade 12

Certificate with Grade 12 / Std 10

Diploma with Grade 12

Bachelors DegreeDegree and Diploma

Honours

Higher Degree

economists.co.za


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The greatest divide between earnings levels due to

schooling is between those who have Matriculatedand those who have only completed grade 11

One salary nearly doubles between grade 11 and Matric.

After completing a bachelors degree, your salary risesby over 350% when compared to that of a Matriculant

Assuming that one completes a degree in around threeand a half years each year of tertiary education equates

to around 12 years of schooling in real life earnings

economists.co.za


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Over a normal lifespan a person with a degree earns a

308% higher return than a person with just matric. The person with Matric earns a 98% higher return

than someone with grade 11. A mariculant also earns

a return 221% greater than that of someone withoutschooling assuming that the person withoutschooling works for five years longer!

A person with a Masters or Doctoral degree earns a

total lifespan return that is 432% greater than thatearned by someone with only a Matric even if theywork 8 fewer years

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All people with an undergraduate qualification earn a

further return of nearly 24% over someone with only aMatric - as they are less likely to be unemployed overthe course of their working life.

This increases the total likely return for obtaining a degreeto over 380%.

A post grad earns a life time return nearly 540% higher -despite working eight years less.

Putting this into context: Matric lifetime earnings (withoutinflation) will be around R4 million and on same basis postgrad will earn nearly R24 million over their working life. Remember however that post grad works eight years less

economists.co.za


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Someone with no schooling will earn just over

R1,15 million in their lifetime - assuming theywork 50 years.

Someone with a masters degree will work 37

years and earn about R24 million. 21 times moreincome over a lifetime! But the person with no schooling has a 30% chance of

unemployment while someone with a masters less

than 5%. So actual working years end up being similar. But the non working years are probably more joyful

(studying) vs. Unemployment

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50 60 70 80 90 100 110 120 130

Services

Physical planning and construction

Communication studies and language

Education, training and development

Health sciences and social services

Post Matric *

Human and social studies

Culture and arts

Manufacturing, engineering and technology

Physical, mathematical, computer and life

Agriculture and nature conservation

Business, commerce and management studies

Law, military science and security

* Services includes hospitality and retail economists.co.za

*


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Law, business and agricultural studies areseen as the better-paid fields.

Services lag quite dramatically - but one mustremember that the hospitality and retailsectors make up much of this sector and thisis governed by department of labour laws. A typical service field of study earns around 48%

of a business related field.

Labour laws seem to hurt the higher educatedmore than the semi- and unskilled.

economists.co.za


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A business owner typically gets 14% more

than someone working for someone else.

This could be higher in the formal sector but

probably not by more than 50%. Around 85% of the employed workforce works for

someone else.

Nearly one in four white males work forthemselves, while one in five Asian males as well

as white females work for themselves.

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0

50

100

150

200

250

300

350

400

450

500

African Coloured Asian White Other * Average

economists.co.za


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The white population group has the highest

income which is about 450% more than black

income and 400% more than coloured

income. However the median salary of coloured people is

lower than that of black people, (Median is where

the 50th person out of 100 would be and isdifferent to average.)

Asians get nearly 70% the earning of whites.

economists.co.za


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0 50 100 150 200 250 300 350 400

15 - 19 years

20 - 24 years

25 - 29 years

30 - 34 years

35 - 39 years

40 - 44 years

45 - 49 years

50 - 54 years

55 - 59 years

60 - 64 years

economists.co.za


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At the age of 40 to 44 a typical worker earnstheir highest income - while in the youngerage groups the pay is less than one third ofthe 40 year old group.

After age 44 income remains high but slowlydeclines relative to that of the 40 to 44 yearold group.

A typical 24 year old earns about 45% of a 44year old while a 30 year old would earn 83%of the 44 year old.

economists.co.za


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40 50 60 70 80 90 100 110 120 130 140

Eastern Cape

KwaZulu-Natal

Mpumalanga

Western Cape

SA

Limpopo

North West

Northern Cape

Free State

Gauteng

economists.co.za


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Eastern Cape earnings per employee is only

60% of that in Gauteng, while the Free State

has the second highest earnings.

This was surprising but the fact is thatunemployment levels are higher in the Free state

and much lower in the Western Cape so the

overall level of income in the Western Cape wouldbe higher.

economists.co.za


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36.4%

25.3%

16.8%

21.6%

MicroSmall

Medium

Large

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0

20

40

60

80

100

120

140

160

180

Micro Small Medium Large All

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36% of employed people work for micro

enterprises (less than 5 employees) and onaverage they earn only 39% of what workers inlarge firms (over 50 employees) get.

Small firms (less than 20 employees) employ justover 25% of workers and have the second lowestpay but it is over 21% higher than the average.

Large firms pay over 55% more than average.

Government generally pays 180% more thanaverage (when filtered out) so that would also bea big difference.

economists.co.za


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Workers who belong to a trade union earn

108% more than the average worker.

Worker not represented by trade unions earn

only 70% of the national average salary. Basically worker who belong to a trade union

earn three times more than workers who are

not represented. This however may also have to do with firm size

as trade unions generally focus on larger firms.

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Education makes the biggest difference by far. Population group is the second biggest factor. Age is the third biggest factor. Firm size is the fourth biggest factor

Government actual average is higher than big firmpay.

Field of study is fifth.

Union membership is the sixth biggest factor. Where you stay is the next factor followed by

whether you own your own business.

economists.co.za


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The average large company director in SA got

about R474 000 per month while the worker gotR11500 per month.

Therefore the average director for these

companies got 41,3 times more than the averageemployee they employed.

However in other countries similar if not even

bigger differences remain. Very few people get to be directors as only one

in 8000 working people get to be directors.

economists.co.za


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Thank you

economists.co.za

Documents

The South African Employment Report - Vol.7[1]