EDITORIAL | The wages of SA’s pay gap will be death

SA carries the dubious honour of being among the most unequal countries in the world. A glance through the annual World Wealth Report for 2022, compiled by the Thomas Piketty-backed World Inequality Lab, reveals numbers that should play on the conscience of even the greediest millionaires. Our average national annual income is R117,260 but the bottom 50% of South Africans earn a yearly average of R12,340. This as the top 10% earn a staggering 60 times more than that, about R780,300.

“While democratic rights were extended to the totality of the population after the end of apartheid in 1991, extreme economic inequalities have persisted and been exacerbated,” the World Wealth Report states. “Post-apartheid governments have not implemented structural economic reforms (including land, tax and social security reforms) sufficient to challenge the dual economy system ... Descendants of slave owners continue to own most of the wealth.”

It is the entrenched inequalities of apartheid that brought us to this point and its legacy continues to hold us hostage. Some wealth has shifted among the top rich but the gap between SA’s richest and poorest has not narrowed. The most recent case in point is Sibanye-Stillwater CEO Neal Froneman, whose R300m pay package in 2021 became public knowledge in the company’s annual report last week. The timing could not have been worse. Mining unions NUM and Amcu had just rejected Sibanye’s final offer to increase entry-level workers’ wages by R850 a year, up from a R700 offer in February. The unions are demanding R200 more — a R1,000 a month salary hike.

Post-apartheid governments have not implemented structural economic reforms (including land, tax and social security reforms) sufficient to challenge the dual economy system.

—  World Wealth Report

This is the ultimate example of the gap between rich and poor: One executive earning R300m, while his company says it cannot afford to give its workers a R1,000 monthly increase. It is not as simple as that though; there are many dynamics at play. The CEO’s remuneration included more than R260m of share proceeds, reflecting a 560% growth since 2018 thanks to a spike in platinum group metal prices. Sibanye-Stillwater’s head of investor relations James Wellsted told Business Times that 46,000 employees who hold shares in Sibanye and Gold Fields through the Thusano Share Trust received R471m in March. Now the numbers sound better but it’s still cold comfort for miner Zizamele Bhekilizwe, 55, interviewed by SowetanLIVE this week. He is a father of five and all his children are unemployed, which means he supports the family, including his grandchildren, on a R10,000 salary.

Finding the middle ground between Froneman’s R300m salary and Bhekilizwe’s annual R120,000 pay is no easy task in a capitalist system. Yet this example should spur South African leaders and politicians into starting to think differently about how to close that never-shrinking gap. In the UK, a report published in 2019 concluded that Britain’s largest companies should cap sky-high salaries for executives and align them more closely with ordinary workers. This is a discussion South African corporates, union leaders and our government should be having. President Cyril Ramaphosa, who has said he wanted to inject life into the Economic Reconstruction and Recovery Plan, through a new “social compact” between labour, business and government, should be using this as a platform to raise these matters. We need a complete rethink on how executives’ salaries can better reflect the context of where we come from and where we want to go.