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

3.45 An attempt was made to verify the results in Table 3.13 and a straw poll was
conducted among builders in the Western Cape. (The poll included two
architects, one quantity surveyor, a consulting engineer and eight building
contractors). The general opinion was that for craft workers the adjusted average
salary is close to the norm while full time construction labourers will earn closer to
the unadjusted monthly salary than to the adjusted salary. (The adjustment
methodology can bias labourer wages downward by including underemployed
labourers and underemployed craft workers with fully employed labourers). As, of
all the provinces, the difference between adjusted and unadjusted labourer
salaries is smallest in the Western Cape (R55 a day compared to R65 a day), a
challenge remains for a micro verification of the accuracy of these estimates in
other provinces.
Town and City estimates
3.46 Estimates of average salaries paid to craft workers and construction labourers for
a selection of towns and cities is presented in Table 3.13. The table also provides
adjusted average salaries using the same correction procedure used for the
national and provincial estimates. As with the provincial estimates, we focus more
on the adjusted salaries for craft workers and the unadjusted salary for
construction labourers.
3.47 In some of the smaller provinces, the Western Cape and Gauteng in particular,
we note that there are few differences with craft worker salaries within the
individual province. This is probably due to the mega-city effect and good
transport systems leading to an equalisation of wages. The two notable
exceptions are for Soweto in Gauteng and Thaba ‘Nchu in the Free State. Here
wages for craft workers are considerably lower than those in the nearby cities of
Johannesburg and Bloemfontein respectively. Because the census measures
people’s place of residence and not their place of work we do not believe that
there can be such substantial wage differences for the same kind of labour within
what is largely the same market. We take it that the lower reported wage rates ae
not distortions in the labour market but the result of underemployment and
oversupply of labourers in particular areas, which forces the wage rate down.
3.48 In the provinces that are geographically larger we do note more variation in the
average salaries of craft workers. We make a general observation (with
exceptions) that there is some correlation between the salaries that craft workers
earn in construction and the size of the town or city in which they work.
3.49 For construction labourers it is not possible to make such generalisations. We
note substantial variation in the average salaries earned by construction workers
in the various towns and cities of South Africa.
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