Answer to Question #199188 in Microeconomics for Tsholofelo Ntsane

Question

A brief explanation of the public wage bill in SA(illustrate trends using graphs and tables)

Why is it a problem in South Africa?

What made it so large?

How can it be controlled?

Can the public sector wage bill be an effective expenditure control measure?

How did other countries deal with public sector wage bill as an expenditure control problem? Can their approach to the problem be done in SA?

Answer 1

In south Africa public wage bill refer to salaries, allowances and benefits awarded to public sector employees.

The figure below shows changes in employment across the public sector from 2010 to 2020.

he public wage bill is a problem in south Africa because a third of its budget is spend on salaries to pay civil servant employees who are about 1.2 million and the number is growing progressively.

The public wage bill in south Africa become too large because the governing national congress decided to empower the disadvantaged black people by giving them public sector jobs which increased the government expenditure on the public sector salaries.

The public wage bill burden can be controlled by the government through making modifications like adjusting the cost of living and stopping automatic pay progression.

Public wage offers protection of lives and livelihoods through provision of jobs. It also ensures healthy lives hence is  an effective expenditure control measure.

Other countries like Europe and Asia are using digital technology to increase efficiency, transparency ,trust and responsiveness in public wage sector. In this case south Africa can also apply the technique since it is accurate and fast.