Answer to Question #199504 in Microeconomics for anathi

Question

-         A brief explanation of the public wage bill in SA

o  (It is advisable to illustrate trends by means of graphs and tables)

-         Why is it a problem in SA?

-         In the discussion provide indication on what made it to be so large

-         How it can be controlled? 

Answer 1

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

The 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.

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