Finding a happy median

2012-06-09 10:29

Mpho Sibanyoni quizzes top economist Mike Schussler on his contentious statement about unskilled labourers

Your critics, such as Chris Malekane (associate professor of economics at the University of the Witwatersrand and Cosatu head of policy), argue that the median earning for formal workers stands at R3 683, whereas you say this figure is R13 200. What is your response to this?

My figure is an average that comes from the Statistics SA quarterly employment survey.

The stats are on page 29 of the latest report. Malekane mixes up averages and medians to suit his own needs.

Although a median shows what the 50th person earns out of 100, it is not always the way countries compare costs across borders, which is what I did.

Malekane says your argument on the wages of South African workers being too high is flawed because the workers’ median earning is $439 (about R3 683), whereas in the United States it stands at $3 024 and $1 116 in Mexico.

In 2010 our purchasing power parity (PPP) rate to the dollar was R5 (from the Organisation for Economic Cooperation and Development website), which is the year in which Malekane says our median was R3 683 in the formal sector.

In PPP term what our median worker gets is R3 683 / R5, which would equal $738 international PPP dollars – much higher than Brazil, for example, which is at $600 international PPP dollars.

With the same method using International Labour Organisation and Organisation for Economic Cooperation and Development data, I would say that in PPP terms median workers in Mexico get R4 300 / R7.90, which equals $542.

Indian salaries are much lower. We are poorer than Americans because theirs is one of the most productive countries in the world.

Our people were already richer than Italians, Greeks and almost all emerging markets, including Mexico, Brazil, China in 2009, and in some years even Russia.

Malekane questions your work because Stats SA figures show that the average unskilled employee earning stands at $241 and the median earnings for managers is at $2 000. The median earnings for a manager in the US stands at $4 948 and $1 160 for unskilled labourers.

Why is President Jacob Zuma calling for a youth wage subsidy?

The subsidy is for two years and is for starter jobs of up to R5 000 a month.

Nobody thinks one should cut wages, but we need to plan for workers costing the economy less especially when the number of those without skills keeps going up.

Although you say 10% of top earners earn less than six times what the bottom 10% earners get, Malekane
says Stats SA’s publication on the monthly earnings of South Africans states that the top 10% of earners
get R12 000 on average, which is 14 times what the bottom 10% take.

If three out of 10 adults worked in the formal sector, the sector would still be the richest third of all the adults in SA.
The richest quarter of South Africans have formal sector jobs.

Labour Research Services state that in 2010 the median elementary salary was R3 600, and this would be for unskilled people.

This would still be 15.2 times the income from a child grant and 3.5 times that of an old-age pension.

What’s your take on Malekane’s view that your argument of halving entry-level wages is unfair because the unskilled workers who are uneducated and are below the age of 34 earn less than R1 250 a month?

We did not talk of halving entry-level wages.

We spoke about smaller increases for entry-level workers for a period of time so that instead of only one out of seven-and-a-half unskilled people having a job, perhaps we can get one out of three of them having a job.

Join the conversation! encourages commentary submitted via MyNews24. Contributions of 200 words or more will be considered for publication.

We reserve editorial discretion to decide what will be published.
Read our comments policy for guidelines on contributions. publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
Comments have been closed for this article.

Inside News24

Traffic Alerts
There are new stories on the homepage. Click here to see them.


Create Profile

Creating your profile will enable you to submit photos and stories to get published on News24.

Please provide a username for your profile page:

This username must be unique, cannot be edited and will be used in the URL to your profile page across the entire network.


Location Settings

News24 allows you to edit the display of certain components based on a location. If you wish to personalise the page based on your preferences, please select a location for each component and click "Submit" in order for the changes to take affect.

Facebook Sign-In

Hi News addict,

Join the News24 Community to be involved in breaking the news.

Log in with Facebook to comment and personalise news, weather and listings.