The Living Wage Project: Questions and complications

If you’re here because you saw a sign up at the Quarry shopping centre, go HERE to find out how much per month you should pay so your domestic worker can take home a living wage. If you’re interested to see some answers to questions and feedback we’ve received, keep reading. Again, to contact the authors, email ann.ebert.oneill(at)gmail.com or steph.ebert17(at)gmail.com or comment at the end here.

First, thanks everyone for the great feedback on the living wage project! If nothing else, we hope that this has helped you at least think about what you pay people, and base this on real information. Hopefully, too, you’ve been challenged to think about how to be an employer that strives to really help people break out of the cycle of poverty as well as help our country.

Here’s some questions with some (kind of) answers that might just spark more questions—but let’s keep talking about this! We’d love to get more feedback and hear your thoughts and ideas.

How can I afford this? Of course, it depends on what you had been paying, but let’s say you’d been paying R2 000 a month. You now have to find an extra R1 600 in your monthly budget, and you don’t know where to find it:

• You might have to sacrifice a bit. There are a lot of us out there that do have room in our budget, if we want to find it. We pay for things like gym memberships, a meal out at Spur, pocket money for our kids, coffee out with friends, and dog food every month. If we knew our money was going towards breaking someone out of the cycle of poverty, I think we could be okay giving up some of those things. If doing justice was easy, everyone would do it—there’s got to be sacrifice sometimes.
•  Think outside the box: A lot of money we spend because of social pressure (our cars, our clothes… those excessive party packs at children’s birthday parties)—things we don’t really want to do, but we do because that’s what everyone does. Daycare is one of those things. We pay R1 500 per child to send children to day care or preschool in Hilton every month. What if you hired someone to do this job for you, paid them a living wage and then also paid for them to take courses through Caversham to get skilled in Early Childhood Education? If you have more than one child (or if you and a neighbor went in together) you could not only upskill someone, but provide a better early childhood foundation and more adult-to-child attention for your children than if you sent them to day care and break even or even save money.
• Only demand the amount of work hours you can pay for: If you really can only afford to pay R 2000 a month, then have your domestic worker come less days of the month. Therefore they are working fewer hours, but getting the same pay, which might allow them to find another part-time job to “make up the difference.”

You should cut the living wage number in half, because you’re assuming only one employed adult in the home, rather than two. We based the living wage on the average family in Sweetwaters. The average family in Sweetwaters is not a two-parent home, so we felt to be fair, we needed to have one person supporting three kids.

I am literally only employing someone because it’s so cheap to do so. I don’t even pay the “nice person” wage, I pay minimum wage. If I had to pay this person more, I just wouldn’t employ them. This is something I often think about as well. As this article argues, domestic workers are a luxury item. (When the petrol attendant strike was happening part of me was in sympathy and the other part was like, “You crazy people, don’t strike or people will realize they actually can pump their own petrol and don’t need to pay people to do it for them!) A surprisingly high number of people are in the domestic labor sector (about 1.5 million) in our economy. While most of us in Hilton are in the privileged position to be able to pay a living wage, there are some in South Africa who don’t have that ability. The last thing the living wage project wants to do is cut people out of their jobs entirely, since so many people depend on that for their income. That’s why this isn’t an argument to raise legal minimum wage. We’re just arguing that as moral people we have an obligation (if you’re Christian, you have an even stronger obligation) to be fair employers. That’s something that many, many of us actually have the means to do. If you literally don’t have the means to do that, then it’s up to you to figure out before God what the best decision would be, whether that’s having someone work less hours for the same pay or something else.

Just because unemployment is so high, and there are thousands of unskilled people in Sweetwaters looking for work doesn’t make is right to pay someone as little as possible, even if straight supply and demand says you can. In the Bible we often see God coming out on the side of the poor because they have no one to defend them. As employers, the whole system is in our favor. There are so many unskilled people we could pretty much pay whatever we want, because we know there is someone more desperate waiting right behind them to snap up the job (any job is better than no job). That hopefully strikes you as a bit unfair. If we can, I think we should pay a living wage. I’m not a macro-economist, I can’t speak to the larger labor issues in South Africa, but in our own sphere of influence we can attempt to do justice. This isn’t about communism or socialism or any other -ism. I’m not arguing for a revamp of our entire economy, so don’t get scared off! 🙂 I’m just asking us to consider how we can act in a moral, just way with what we have.

I don’t pay a ‘living wage’ but I do pay for my domestic worker’s child’s school fees which is an extra R2000 a month, on top of the R2000 I already pay. Is that okay? What should I do? The two key aspects about a living wage is that it gives people freedom to make choices for themselves, and it has the potential to help them break out of the cycle of poverty.

One reason why we provided the break-down of the categories showing what the money in the living wage is allocated towards is so that as an employer you’re able to get the information you need to make wise decisions about what you pay your workers. If you look at the breakdown and you are paying your domestic worker enough to have food, shelter, transportation, healthcare etc. and then personally cover their children’s school fees as well, you might feel that this has the greatest potential to break someone out of the cycle of poverty. Someone else might feel that is paternalistic, and prefer to give the money directly to the person in their wages, which gives their employee more freedom to make choices. It’s a tension and something you’ll have to wrestle through yourself. (Of course, you could always avoid moral dilemmas and pay a living wage and then personally pay for the child’s school fees on top of that! 🙂 )

Poverty is more than just lack of money. It’s holistic- lack of education, lack of social, spiritual, and physical resources. Just giving someone more money can’t really break them out of poverty. Paying someone a living wage is not the be-all-end-all-get-out-of-jail-free card for acting morally and justly in our society. It would be great to have a holistic approach and see if there is anything you can do to help your employees get out (and stay out) of poverty. For example, the poor are prey to slick advertisers who push people into consumer debt, saving is difficult when you’ve been living hand-to-mouth for so long. I don’t think this means you shouldn’t pay someone a living wage. But maybe it means that you also can help with practical things like money management skills (my US friends might call me paternalistic, but many of us pay other people to be our financial planners because we haven’t a clue—how much more for someone just getting out of poverty?).

• Help your employee set up a savings/investment account. Give them the option to have you direct deposit into that account before paying out their salary.
• Help your employee set up a Fundisa account if they have a child who needs to be educated. This is saving for the future and specifically for education.
• Find out if there are any other direct-deposits your employee would like you to set up- perhaps they would like you to directly pay their UNISA fees or school fees for a child.
• What this means, though, is having a conversation with your employee and getting to the point that your employee feels comfortable sharing these things with you. Something else to work on. 🙂

How can I pay someone more when I know for a fact that money is not going towards education or anything that will break them out of poverty, but rather consumer debt which will drive them further into poverty? The short answer is when you pay someone you have no control over what they do with that. Freedom is a double-edged sword. However, some research is showing directly giving people cash can still help people break out of poverty and basing whole charitable models around it (check out GiveDirectly). Many people I’ve spoken with, though, have personal experiences of seeing employees get buried in consumer debt or clamped down with vices such as alcoholism, and are therefore reluctant to take such an uninvolved approach. If our argument so far has been a moral one and not a straight-up economics one, then surely these other moral components should be taken into consideration? (Answer: I don’t know. Freedom is messy. At least think about it).

Questions? Answers to some of the questions posed here? Share your thoughts with us!