South Africa's public sector employees are paid better than their private sector counterparts, with the median salary being R46,000 per month. Labour analyst Andrew Levy argues that this better remuneration has not resulted in better productivity. He believes that the increases received by the public sector, without a corresponding increase in productivity, are unsustainable over the long term. According to data collected by Levy, 50% of government employees earn more than R46,000 per month.
In the private sector, CEOs of large, listed companies earn far more than government ministers, director-generals, or even the President. However, Levy believes that CEOs deserve to be paid more because a large part of their remuneration is classified as risk remuneration, which refers to the significant bonuses and incentives CEOs receive based on their performance. In contrast, in the public sector, employee remuneration is solely determined by the increase negotiated by trade unions, making the public sector labour force highly inflexible and inefficient.
South Africa's Finance Minister Enoch Godongwana announced that he would honor the public sector wage deal struck in March to give employees a 7.5% increase, though it had only budgeted for a 4.5% raise. The deal will come at an additional cost to the Treasury of R23.6 billion, and government departments must find the remaining R10.1 billion through reprioritisation of budgeted funds. Over time, a higher proportion of government employees have moved into higher-earning categories due to the higher cost-of-living adjustment agreed to in wage negotiations.
