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South Africa: Education is a Salary Determining Factor
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BuaNews (Tshwane)
8 May 2008
Posted to the web 8 May 2008
Michael Appel
Johannesburg
Education has emerged as the greatest determining factor in South Africa when it comes to salaries, economist Mike Schüssler said on Thursday at the release of the 7th United Association of South Africa (UASA) Employment Report.
"A person's education makes the biggest difference by far [in the salary a person earns], population group is the second biggest factor, and a person's age is the third biggest factor for a South Africa," said Mr Schüssler.
The theme of the 7th UASA Employment Report, which was researched and compiled by Mr Schüssler, is "What are you worth?"
In determining what an employee is worth, he said, a number of factors were brought into the equation including education, field of study, area of work, population group, age, whether or not a person had trade union membership, and the size of the business.
Illustrating the immense impact getting a degree from a tertiary institution has in relation to what salary a person earns he said after completing a Bachelors Degree, one's salary rises by over 350 percent when compared to that of a matriculant.
"The greatest divide between earning levels due to schooling is between those who have matriculated and those who have only completed Grade 11.
"Over a normal lifespan [in which the average person works 50 years], a person with a degree gets a 308 percent higher return [or salary] than a person with just a matric.
"A person with a Masters or Doctoral degree earns a total of 432 percent greater than that earned by someone with only a matric - even if they work eight years fewer."
Interestingly, the reports noted that a person with absolutely no formal education will earn just over R1.15 million in their lifetime, assuming they work for 50 years, while someone with a master degree will earn R24 million in only 37 years.
A person with a Masters Degree will by that measure earn about 21 times more income in a lifetime than an uneducated person.
Mr Schüssler also touched on what fields of employment earn the greatest salary. Law, military science and security and were the top fields in terms of salaries.
Coming in second on the field of employment earnings list was business, commerce and management studies, followed by agriculture and nature conservation; manufacturing engineering and technology; and culture and the arts.
At the bottom of the list was the very broad employment field of services, while communication studies and language, the field journalists are categorised in, was third from the bottom.
Discussing population groups versus earnings, Mr Schüssler said the white population of South Africa was still the greatest earners by far, earning 5.5 times (450 percent) more than black South Africans, and almost 400 percent more than coloured South Africans.
"At the age of 40 to 44, a typical worker earns their highest income -while in the younger age groups the pay is less than one third of the 40 year old group.
"A typical 24-year-old earns about 45 percent of a person who is 44-years old, while a 30-year-old person would earn 83 percent of a 44-year-old's salary," said Mr Schüssler.
Provincially, he said, Gauteng is still the biggest earner, followed by Free State, Northern Cape, the North West Province, Limpopo, Western Cape, Mpumalanga, KwaZulu-Natal, and in last place is the Eastern Cape.
Eastern Cape earnings per employee are about 60 percent of a person living in Gauteng he said.
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With regard to expected wage increases, Mr Schüssler said South Africans can expect wage increase of just over 11 percent this year, with the average wage increase in 2007 coming in at 9.2 percent.
Wage increases will be linked to Consumer Price Index excluding interest rates on mortgage bonds (CPIX), and the April 2008 figure stands at 10.1 percent currently.
Employment growth slowed to about 2.3 percent in 2007 but is still positive, however, the 2008 employment growth statistic is expected to be only 1.5 percent, "which is well below what is needed for the country currently," he said.
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