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< What the Big Mac index says about the value of the rand
Economics Main Page

Average hourly wages per industry: South Africa vs United States
​​​
Date: 27 Aug 2018
Category: Economics

Related Topics

Ever wondered how South African salaries earned compares to salary earners in the United States? We compare the average hourly wages (expressed in US dollars) per industry between South Africa and the United States.

South African hourly wages is derived from the Quarter Employment Statistics (QES) gross earnings per industry. 

Picture
  • American tourists coming  to SA

So in US dollar terms who earns more per hour? Americans on South Africans?

The bar chart below is based on data retrieved from the Bureau of labor statistics (BLS) and Statistics South Africa, and focuses on earnings as at March 2018. per industry.
chart created with amCharts | amCharts
The first observation one can make from the bar chart above is the fact that "Electricity, gas and water supply" hourly wages for South Africa is far greater than any of the other industry's earnings, be it in South Africa or the USA. This is due to ESKOM paying excessive salaries to low level staff, as well as paying out massive bonuses to staff that would absolutely bankrupt other firms. And it has basically bankrupted ESKOM, well that and large scale looting and corruption. But forgetting the aforementioned this industry is the highest paying industry in terms of hourly wages in both South Africa and the United States. 

While the average hourly wage in the "Utilities" industry in the USA is $36.8 an hour, it is dwarfed by the South African equivalent of $66.6 dollars an hour. Funny that figure looks like the sign of the devil. Well we think the devil has had a hand in ESKOM's deep seated corruption and looting.

In 7 of the 10 industries looked at South Africans earn more per hour than their US peers. The US employees earn more in only three industry and they are:
  • Construction
  • Retail Trade
  • Hotels and restaurants
These are all industries in which South Africa uses relative unskilled and uneducated labor in, which could explain why the US counterparts are earning more in these industries. But it is surprising that South African employees earn so much more than their US counterparts. Perhaps this is part of the reason the South African unemployment rate is so high, as the high wages demanded by employees (and their labor unions) makes it near impossible for employers to employ additional staff. 

The United States has a unemployment rate of 3.9% while South Africa's unemployment rate is sitting at a staggering 27.2%, Perhaps labor unions in South Africa should take a look at this. Instead of persisting with ridiculous wage demands every year, rather demand lower wage increases but increased employment. This will also have a benefit for labor unions as more people employed will lead to greater union membership numbers.

The table below provides a summary of the average hourly wage (in dollars) per industry for both South Africa and the United States of America

Picture
Readers should note we are not saying South Africans are richer than US counterparts. We are merely stating per hour South Africans earn more than their US counterparts. But South Africa has higher inflation rates, which means our value of money decreases a lot faster than US counterparts, the cost of goods could be a lot more expensive in South Africa, which implies the amount of dollars earned per hour does not go as far as it would in say the United States, And other factors such as taxes, service delivery quality, healthcare, public safety etc all plays a role when one starts to look at the overall welfare and wealth across countries, This article merely highlights the difference in average hourly wages (in US dollars) per industry between two different countries

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