Eskom’s electricity tariff hikes pose a direct threat to South Africans’ consumption of nutritious food, household savings, functionality and health.
This is according to the Pietermaritzburg Economic Justice & Dignity Group (PMBEJD), which on Wednesday released its latest household affordability index report, which warns about the risk the 18.65% hike poses to South Africans struggling to survive on a minimum wage.
“Where wage proposals have preceded the Eskom announcement, like the national minimum wage, these proposals must be adjusted upwards to mitigate the higher electricity expense,” said Mervyn Abrahams of the PMBEJD.
The minimum wage could be hiked by about 8% this year — from R23.19 to R25.13 per hour.
Abrahams said Eskom’s hikes were well-above inflation and had long surpassed the affordability thresholds of households earning low wages.
“The rand-value of the service itself takes a very large portion of the basic low wage resulting in workers having significantly less money to allocate to other critical expenses.”
Current PMBEJD data shows that electricity takes up 20.2% of the national minimum wage (NMW).
The Eskom price hikes pose a direct threat to household functionality, productivity, proper nutrition and health, education, household savings, and the ability of workers to actively spend and consume in the economy; and it destabilises labour and society.
— Mervyn Abrahams of the PMBEJD
“With the 18.65% hike at the proposed 8% NMW increase, electricity expenses may take up 22.2%, and this is untenable.”
He said electricity is a non-negotiable household expense regardless of the price.
“The massive chunk of money now having to be reallocated to securing electricity undermines the possibility of meeting all other essential needs.
“The Eskom price hikes pose a direct threat to household functionality, productivity, proper nutrition and health, education, household savings, and the ability of workers to actively spend and consume in the economy; and it destabilises labour and society,” said Abrahams.
He believes the hike must be absorbed within any new wage agreement to mitigate the severe consequences of the higher electricity tariffs.
“The 8% NMW increase will just ensure a worker’s family is able to live at exactly the same level they lived at in 2022 — a level of hell, where worker’s families underspent on proper nutritious food by as much as 50%, and lived in a constant state of food poverty.”
The latest household affordability index report, which tracks food price data from 44 supermarkets and 30 butcheries in Johannesburg, Durban, Cape Town, Pietermaritzburg and Springbok in the Northern Cape, shows the average cost of the food basket increased by R516.40 (11.7%), from R4,401.02 in January 2022 to R4,917.42 in January 2023.
Foods which increased in price in January 2023 by 5% or more include: potatoes, sugar, cabbage, carrots, apples, oranges, wors (9%), curry powder, stock cubes and soup.
Foods which increased in price in January 2023 by 2% or more, include: cooking oil, samp, salt, tea, eggs, beef, tomatoes, spinach, green pepper, tinned fish, bananas, margarine and brown bread.
The report predicts families will underspend on food by about 52%, in light of electricity and transport costs.
“In this scenario there is no possibility of a worker being able to buy proper nutritious food for her family,” the report states.
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