Answer to Question #199173 in Microeconomics for Zamkelekile

Question

- Provide a brief explanation on the background of the public sector wage bill in South Africa

Answer 1

Public wage bill refers to the amount of money the government is supposed to spend on paying all the civil servants on a monthly basis.

The wage bill in South Africa is such that the government spends almost a third of its budget paying the wages of it's civil servants. It is more worrying because the wage bill is on an increasing trend to the value estimated to be 697 billion Rands.

This situation was brought about by the move of the government to empower more disadvantaged black people by placing them in the public sector jobs after the end of the apartheid. 

This has caused a major economic issue in the country. The government is currently perceiving to freeze the wages of the public sector for the coming years so as to cut the country's salary bill and contain the prevailing budget deficit. This issue has led to the rise of risks of industrial action by the strong 1.3 million public sector workforce.