So. Africa: University of Cape Town criticised for using poverty measure to benchmark minimum wage of outsourced staff

University of Cape TownThe University of Cape Town (UCT) has come under fire for using the Cost of Basic Needs (CoBN) measure as a benchmark to assess the adequacy of its minimum wage. Josh Budlender and Johan Lorenzen argue that this '...is conceptually problematic, however, as...the CoBN measure is a poverty line, and is not designed for wage-setting '. The full analysis and UCT's response are provided below:

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Article
11 December 2014

So. Africa: University of Cape Town responds to allegations of poverty wage for outsourced staff

Author: Frances Petersen in Ground Up

'UCT responds on minimum wage', 10 Dec 2014: UCT's Deputy Vice-Chancellor [Professor Frances Peterson says]...As a publicly funded institution, we have a duty to spend as wisely and effectively as possible...But another consideration has always been the welfare and...fair treatment of...colleagues....contracted to UCT via outsourcing...UCT is committed to ensuring that these colleagues do not come under any disadvantage...For this reason, the university has drawn up, and enforces, a code of conduct that must be signed and adhered to by...outsourced companies...to ensure a minimum wage is paid to every outsourced worker that is higher than the country’s minimum wage...UCT has demonstrated leadership in...upholding fair treatment and workers’ rights...The challenge has been in finding a correct methodology in calculating such a level...The university wants to emphasise that its commitment to the welfare of outsourced workers remains strong and that it will continue to seek to set a minimum wage that exceeds the industry norm.

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Article
8 December 2014

So.Africa: Analysts deride University of Cape Town's use of poverty measure to benchmark outsourced staff wages

Author: Josh Budlender and Johan Lorenzen in GroundUp

'UCT's muddled minimum wage', 8 Dec 2014: In June 2013, the University of Cape Town instituted a review of outsourcing at the university...[which] advocated for meaningful increases in the minimum wage prescribed for outsourced workers...Yet the university's management rejected this recommendation in favour of keeping the minimum wage at a level which is well below the poverty line that it uses as a benchmark. This means that by UCT’s own measure it prescribes a poverty wage for the majority of the outsourced workers on its campus...The benchmark that management uses to assess the adequacy of its minimum wage is a Cost of Basic Needs (CoBN) measure...[which] is conceptually problematic...[as the] CoBN measure is a poverty line, and is not designed for wage-setting...It is even more disappointing that UCT has attempted to brand this wage as aligned with its commitment to “promote social justice and equity.” ...

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