The South African Reserve Bank (SARB) has found in its latest Labour Market Frontiers survey that earnings in South Africa’s formal sector have risen slightly in real terms since 1994, driven by an increase in the earnings of skilled workers, while the earnings of unskilled and semi-skilled workers remained flat over the 1995 to 2005 survey period.
The survey found the gap in earnings between men and women initially widened during the period reviewed, but seemed to have narrowed since 2000.
In their study of wage inequality by occupation, sector, race and gender, the authors showed that South Africa continued to be characterised by huge wage inequalities which manifested themselves along racial, gender, industry and education lines.
Using a multivariate framework, the authors found that the racial gap in earnings narrowed between 2001 and 2005, while the gender gap widened.
The authors also found that the degree of wage dispersion in the public sector was much lower than it was in the private sector.
The survey found this was because workers in unskilled occupations earned substantially more in the public sector than they would in the private sector, while the converse was true for highly skilled and managerial occupations. Thus, while the public sector paid better on average than the private sector, this was not the case at the upper end of the wage distribution, the survey found.
Data from Statistics South Africa’s biannual Labour Force Survey of approximately 30 000 households was used in the survey. This was the eighth edition of the SARB’s Labour Market Frontiers. – I-Net Bridge