The Parliamentary Portfolio Committee on Trade, Industry & Competition will hold public hearings on the Companies Amendment Bill in the week of 16 October.
Some of the Bill’s most crucial amendments relate to wage gap disclosure, requiring state-owned and listed companies to disclose the pay of their highest- and lowest- paid employee, the average and median remuneration of all employees, and the remuneration gap between the top 5% highest- and bottom 5% lowest- paid employees.
The amendments have been in the pipeline for at least five years, and versions of the Bill were released for public comment in 2018 and 2021. They stem from government’s recognition – as repeatedly confirmed by Stats SA – that inequality in pay contributes as much to overall income inequality as joblessness.
Judging by responses to previous versions of the Bill, wage gap disclosure is generally not supported by business associations and many large asset managers. They believe the disclosures are unnecessary and will be misinterpreted, cause business leaders to leave the country, and even harm South Africa’s investment attractiveness.
This resistance to wage gap disclosure contradicts corporate South Africa’s oft-stated commitment to addressing inequality.
The issue of wage gap disclosure elicits strong feelings amongst many middle-class people. This was evident when my organisation published what we thought was an innocuous briefing on wage gaps at seven listed companies that have – to their credit – voluntarily published this information.
The briefing provoked an extraordinary backlash, particularly in relation to the wage gap at Shoprite. In 2022, Shoprite’s CEO earned more than 1000 times the pay of a full-time worker earning the company’s internal minimum wage of about R57 800 a year, or R4817 per month.
The backlash was not against the CEO’s pay package: his “right” to earn that much was vociferously defended. But many comments were made about how, given high levels of unemployment, the lowest-paid workers should count themselves lucky to have any job at all.
This is a common view that is perplexing for its lack of empathy.
Why do so many people who support the payment to one individual of tens or hundreds of millions of Rands begrudge a decent living wage for the hundreds of thousands of ordinary workers who also play an important role in any company’s success?
Two phenomena much studied by social psychologists might provide insight into this persistent dichotomy.
The first is the concept of “dehumanisation”, in which advantaged groups dehumanise less-advantaged peers by attributing the full spectrum of human emotions to members of their own group, but not to those of others.
Studies of dehumanisation often focus on race and ethnicity, but the concept is equally relevant to socio-economic status. Groups that enjoy high socio-economic status often dehumanise those in lower social strata. This helps them to believe that they are rich because they are worthy of being rich, and that the poor are poor because they aren’t smart enough or haven’t worked hard enough.
The second concept is the “principle-implementation gap”, observed in research on attitudes to racial equality. Studies of racial attitudes in the US and post-apartheid South Africa consistently find that most whites accept racial equality as an ideal (“the principle’’), but do not support interventions aimed at achieving the implementation of that ideal (for example, narrowing the wage gap).
Dehumanisation of the working poor, as well as what appears to be a gulf between how people perceive inequality, and what they are willing to do to address it, provide insights into why there is so much resistance by so many of the better off in South Africa to issues such as wage gap disclosure, a living wage, and a universal basic income.
Researchers also find, however, that contact between individuals of different groups can improve empathy for disadvantaged people and increase the willingness of the advantaged group to take collective action to rectify injustice.
It would be fascinating to conduct an experiment in which those opposed to wage gap disclosure spend time working as Shoprite cashiers and maintaining their families on R4817 a month. Would they still believe, I wonder, that the people with those jobs should count themselves lucky?
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