Employed yet poor: low-wage employment and working poverty in South Africa

ABSTRACT

Working poverty exists worldwide and has shown an increase in prevalence over the past few decades. Over the years, there has been an increase in the number and severity of low-wage employment, which in turn contributes significantly to poverty. Whilst paid employment has generally been considered as the predominant means to survive financially, salaries may be too low to maintain reasonable living standards. South African research on low-wage employment and working poverty in particular, are rare. Using data from the first four waves of the National Income Dynamics Study, this study fills the existing research gap by examining low-wage employment, working poverty, and low-wage poverty. The empirical findings indicated that all three groups are predominantly lowly-educated, middle-aged African female employees involved in elementary occupations in the informal sector.

KEYWORDS:

• Low-wage employment
• working poor
• low-wage poor

JEL:

• J00
• J30

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

1 Individuals who suffer working poverty will be referred as ‘working poor’ for the rest of the study.

2 In this study, two key criteria, namely labour market status (a person-level variable) and poverty status (a household-level variable) are used to distinguish the working poor – to be explained in Section 3.

3 There are four population groups in South Africa, namely Africans, Coloureds, Indians and Whites. The first three groups of people are collectively known as ‘Blacks’.