Is the living wage a solution to poverty in South Africa?
A living wage is a pivotal tool for alleviating poverty in South Africa. This is according to Professor Ines Meyer, a professor in organisational psychology at the University of Cape Town and Chairperson of the Living Wage South Africa Network (LWSAN).
“The living wage tackles poverty directly and reduces the need for government assistance programmes,” says Meyer.
With so many unemployed in South Africa, how could a concept aimed at low-wage earners provide relief to those who have no job?
What the living wage is
The living wage differs from the minimum wage in several ways.
The minimum wage is determined through negotiations between government, organised business and labour, community constituencies, and economic experts and is much lower than the suggested living wage.
The living wage amount, which is issued by the Living Wage South Africa Network, is based on polls with workers used to derive at the minimum income required to enable them to sustain a life they value, not just to survive.
Meyer describes it as an income that can allow a person to achieve a humble, but decent and dignified life, for themselves and their family, and save something for the future or address common emergencies.
While the minimum wage is compulsory under law, employers offer a living wage voluntarily in recognition of the equal worth of human life.
For 2026, LWSAN’s research sets the living wage at R20,000 per month.
Alleviating poverty at multiple levels
While South Africans are rightly concerned by the country’s high unemployment figure, a large number of employed people continue to live in severe poverty.
“There is a point where someone becomes so wealthy, they no longer want for anything; in the same way, a person can earn so little that they get poorer than when they were not working,” says Meyer.
“To work often means incurring additional costs. Think of transport, childcare, sometimes clothing. At low wages, loans are required to make it through the month – which then cannot be repaid and increase debt that didn’t exist before. Low wages also mean having to sacrifice essentials. To afford accommodation, they must sacrifice food, for example, and vice versa.”
However, when an employer pays a living wage, they elevate their workers’ lives to a point where they start having choice in life, such as about the food they buy, not just as individuals but also as families. For many households, this includes extended family.
“Many of those who work in South Africa shoulder the added responsibility of caring for unemployed individuals. And many of those who do so are low-wage earners,” says Meyer.
In this way, the living wage alleviates poverty directly among the low-earning employed and indirectly for the penniless unemployed.
Why employers should embrace a living wage
It’s easy to understand why employers might balk at the concept, especially in a market that measures human value by industry rates.
Also, a common assumption in times of difficulty is that employers need to cut staff costs. While common practice, it is not necessarily the best approach. As shown, under certain conditions, increasing wages can increase profitability and even turn companies from running losses to becoming profitable.
Beyond the advantage for organisations themselves, paying higher wages to low-income workers comes with wider benefits. By attacking poverty directly in the pockets of workers, society participates in a decentralised and democratised initiative to end its scourge.
“Many in South Africa have voiced distrust in government’s ability to provide assistance to the poor, because of spending on administrative and operational costs, red tape, mismanagement, inefficiencies, or corruption,” says Meyer. “It’s seen as a leaky funnel riddled with holes.”
A living wage, paid directly into the hands that need it, suffers no such drawbacks and provides inherent guarantees of its effectiveness.
Tax implications
When pressure on the government to address poverty is reduced, it reduces the portion of tax revenue required to be allocated to public services. Eventually, this might make it possible to reduce VAT rates, and thus, benefit everyone.
Meyer proposes that government could consider awarding employers who commit to living wages tax breaks, to alleviate employers’ fear around rising staff costs.
“It’s a powerful mechanism for society to alleviate poverty outside of state structures, and for everyone who supports ubuntu, this is a demonstrable manifestation of its ideals,” says Meyer.
The shared bowl
Elements of this exist in other societies, Meyer says, mentioning Gabon and Senegal as examples. During a trip to the Casamance region in Senegal, she was exposed to the country’s core philosophy, Téranga.
Téranga means that where everyone, even a stranger, is welcomed through radical inclusion, all are provided for through communal sharing, and social harmony is achieved through mutual respect, kindness and peaceful coexistence, regardless of individual beliefs, origins or status. This kind of existence lowers existential fears for survival, and thus the level of stress which accompanies many of our lives.
“It’s a meaningful existence that allows its people to live with limited state support because they don't need it - they take care of each other,” says Meyer.
This is exemplified by the shared bowl - family and guests in a home eat from one bowl, whether there is plenty to go around or very little.
“When we see each other like this - worth taking care of - then the living wage becomes a banner for equality and societal wellbeing rather than a cost-to-company,” says Meyer.
For more information on LWSAN please visit:
The Living Wage South Africa Network is a platform that connects stakeholders working towards fair and sustainable wages in South Africa. Through research, resource sharing, and advocacy, the network supports and encourages organisations to pay wages that enable workers and their families to meet their basic needs and live with dignity.