Why Fair Compensation Matters Now More Than Ever

South Africa’s recent National Minimum Wage (NMW) increase from R25.42 to R27.58 per hour, in March 2024, reflects a critical shift towards fairer compensation for workers across various sectors, including domestic staff and agricultural workers.

Roughly 432 million small-scale farms produce an estimated 46% of the world’s food. Despite their critical contribution, research suggests most struggle to earn enough to fulfil basic needs—food, housing, healthcare, education, transport, and small savings. This stark reality underscores the importance of addressing not just minimum wages but also living wages that allow individuals to meet their essential needs and live with dignity.

While this wage increase marks progress, there is a growing awareness that for many South Africans, a minimum wage alone does not guarantee a ‘living wage’—one that provides the means to live with dignity and meet essential needs.

As economic pressures persist, the urgency to achieve equitable income levels for workers has become a focal point for advocates and organisations alike. According to Employment and Labour Minister T.W. Nxesi, the new National Minimum Wage ensures a ‘floor level’ below which no employee should be paid, protecting workers from exploitation.

Yet, with inflation and rising costs of living, earning a living wage remains a distant goal for many. This challenge has sparked renewed calls for fair compensation that extends beyond basic wage compliance, emphasising the need for wages to grow at rates above inflation, linked to economic indicators that directly affect workers’ daily lives.

“Paying workers a wage they can live on is more than a legal or economic issue; it’s a matter of human dignity,” says Zinhle Ndlovu, Head of Region – Southern Africa Region at Fairtrade Africa. “A living wage means that individuals can cover basic needs like food, shelter, and education without falling into a cycle of poverty. South Africa’s current minimum wage improvements are a step in the right direction, but we must continue pushing for wage structures that truly support a decent standard of living.”

To further this goal, Fairtrade Africa’s ‘Be Fair Right Now’ initiative is urging consumers and businesses to choose Fairtrade certified products, which align with Fairtrade standards and that promotes sustainable income models that empower individuals to thrive rather than just survive. Fairtrade champions standards that support fair pricing, living wages, and community reinvestment, with a focus on helping farmers and workers achieve a sustainable income that fosters both financial stability and long-term security.

At the heart of Fairtrade’s approach is the belief that farmers and producers in South Africa and globally deserve fair compensation for their labour – especially those working in supply chains that generate substantial profits worldwide. Fairtrade Standards provide a framework that protects these workers, work towards they receive fair prices and premiums that go beyond covering production costs to contribute to community development. Initiatives supported by these premiums include building schools, improving healthcare access, and investing in sustainable agriculture—all essential to helping communities thrive.

“Millions of workers in producing countries struggle daily to make ends meet despite being at the heart of global supply chains worth billions,” Ndlovu adds. “Fairtrade is dedicated to advocate that farmers and workers achieve a living income, which not only respects their labour but also strengthens their communities.”

The ‘Be Fair Right Now’ initiative, now in its second year, runs from November to December and invites South Africans to rethink their buying choices to support fairer pay as well as gender equality, environmental sustainability, and climate action. Through Fairtrade’s interactive online quiz, participants can discover the impact of their current purchases, explore practical ways to support Fairtrade-certified products that pay workers fairly, and even stand a chance to win.

Living Wage, Living Dignity

As South Africa’s NMW commission considers future increases, projected changes for 2025 are expected to keep pace with economic realities. Through ongoing consultations, the government has committed to annual wage hikes that exceed inflation rates, aligning with the consumer price index (CPI) to help workers retain purchasing power.

The process invites input from stakeholders, unions, and businesses to determine a fair increase that reflects both the economic landscape and the basic needs of workers. The Department of Employment and Labour is seeking feedback from citizens on potential adjustments to ensure a balanced approach, factoring in inflation, collective bargaining outcomes, and the economic viability of small and medium enterprises.

With initiatives like ‘Be Fair Right Now’, Fairtrade Africa hopes to raise public awareness and urge stakeholders to prioritise living wages that offer workers more than a minimum wage—making it possible for families to live with dignity and security.

To participate, South Africans can visit Fairtrade’s campaign page, take the quiz, and discover how their choices can support living wages and fairer incomes for workers.