SETP No. 14 The Economic Value of Incremental Employment in the ...

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Table 3-4 Construction industry Percentage difference from national average construction salaries Construction total House construction Civil engineering Western Cape 5.9% 10.4% -2.0% Eastern Cape 13.4% -11.4% 30.8% Northern Cape -18.8% -16.0% -16.9% Free State -5.3% -8.5% -3.9% Kwazulu Natal 1.2% 15.0% -4.4% North West 3.0% 4.5% 10.1% Gauteng 4.9% 20.8% -3.3% Mpumalanga 10.2% -6.7% 13.6% Northern Province -14.4% -8.0% -24.1% Source: Construction Census 1994 Size of firm differences 3.17 One interesting relationship that did emerge was between size of firm and average salaries paid. These results are illustrated in Figure 3.7 for the construction industry as a whole but excluding civil engineering and for civil engineering firms only. In the very small firm size civil engineering pays one of the highest average wage rate while construction generally pays the lowest to the very small firms. The civil engineering differences are explained by the likelihood that these are consulting firms. The general industry average is less easily explained – possibly these are emerging contractors. If this is the case this has important implications for targeted procurement and the national public works programme. 3.18 We observe that an increase in the size of the firm leads to an increase in wages with the rest of the construction industry having wages slightly higher than in civil engineering projects. Very large firms pay some of the highest wages in the industry with large civil engineering firms paying the highest average wages of all. It is suspected that these high civil engineering wages paid to large projects are probably the result of where these projects are situated and the fact that workers will be away from home for long periods of time. Skill differences 3.19 An attempt was made to estimate the differences that skill levels make to salaries in the construction industry. These skill differences are not reported in the construction census and other data sources were consulted. In the early stages of this study the 1997 October Household Survey was analysed in an attempt to determine these differences. These results are reported below although they are less than satisfactory. Subsequent to this analysis the 1996 census was released by Statistics SA. The census data was analysed with a view to determining occupational wage differences. This met with far greater success and the results are also reported below. (The clear reason for the better results from the census relative to the October Survey is that survey has 65,000 respondents while the community profile of the 1996 census reports on 13 million respondents). 11
Figure 3-7 1997 October Household Survey Average Annual Salaries paid by Size of Firm 2000 values 1000 + 500 -999 400 -499 Number of employees in Firm 300 -399 200 -299 100 -199 50 -99 20 -49 Civil Engineering Construction ex. Civil 10 -19 5 -9 - 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 Average annual salary 3.20 The October Household Surveys are very detailed surveys that are capable of providing a wealth of information. The Surveys allow people to very clearly identify the kind of work that they do and the kind of industry where the work is undertaken. Of relevance to this study, Table 3.5 illustrates the level of detail to which work in the construction industry can be categorised. 3.21 The different work categories in Table 3.5 have been aggregated into five general definitions: bricklayers, concrete workers, carpenters, construction labour, semiskilled construction labour, as shown by the groupings in the table.. Average wages paid to each of the skill categories were calculated. Much to our consternation the results were counterintuitive. The results showed improbably low wages and an inverse relationship between skill levels and wages. In order to address this problem the final calculations are based on the hourly rate worked for the past seven days and are reported in Table 3.6 below. The table reports on the mean and standard deviation for the nine provinces and for the nation as a whole. 3.22 It will be immediately apparent that a similar (although less pronounced) inverse relationship exists between skills and remuneration. In the ‘Total’ column, for example, bricklayers earned an average R3.7 an hour (in 1997) while concrete workers earned R3.2, carpenters R6.1, construction labour R5.2 and semi-skilled labour R3.7. Intuitively one would expect bricklayers and semi-skilled labour to earn more than labour. 12
Page 1 and 2: SETP No. 14 The Economic Value of I
Page 3 and 4: Copyright © International Labour O
Page 6 and 7: Table of Contents PREFACE .........
Page 8: List of Abbreviations CBPWP GDP ILO
Page 12 and 13: Structure of the Report This report
Page 14: 8. It is shown in the forth area of
Page 17 and 18: 1.8 In order to achieve this object
Page 19 and 20: 3 A Labour Focussed Profile of the
Page 21 and 22: Figure 3-2 Employment in the Constr
Page 23 and 24: construction. Real wages are higher
Page 25: Table 3-3 Construction industry Ave
Page 29 and 30: 3.23 There are four possible reason
Page 31 and 32: Figure 3-8 Number of persons by inc
Page 33 and 34: 3.35 Estimates of average provincia
Page 35 and 36: 3.41 Table 3.11 reports on the prov
Page 37 and 38: 3.45 An attempt was made to verify
Page 39 and 40: Summary 3.50 The construction indus
Page 41 and 42: A profile of income and expenditure
Page 43 and 44: Figure 4-1 Percentage of expenditur
Page 45 and 46: Table 4-3 Expenditure increases for
Page 47 and 48: Table 4-5 Expenditure increases for
Page 49 and 50: 4.18 Here we find that grain mill p
Page 51 and 52: • Labour and capital are in unlim
Page 53 and 54: Figure 5-1 Schematics of the Mechan
Page 55 and 56: slightly higher additional income a
Page 57 and 58: Table 5-9 Indirect job creation Num
Page 59 and 60: 6 The Macro Economic Impact of the
Page 61 and 62: Standard Industrial Classification
Page 63 and 64: Table 6-6 Macro economic impact of
Page 65 and 66: Figure 7-2 Cost of Gravel Road Cons
Page 67 and 68: • When adverse soil or other cond
Page 69 and 70: Table 7-5 Capital cost amortisation
Page 71 and 72: Table 7-8 Local and Import costs of
Page 73 and 74: • In the first five years of oper
Page 75 and 76: 7.41 Table 7.4 is sourced from Tabl
Page 77 and 78:
8.10 Second, the analysis did not t
Page 79 and 80:
References Bulmer-Thomas, V. (1982)
Page 81 and 82:
practical feasibility alone, labour
Page 83 and 84:
domestic industry to set against th
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