A DECOMPOSITION OF REAL WAGE GROWTH FOR SOUTH AFRICAN MANUFACTURING BY SIZE CLASS: 1972-1996

The SME sector in South Africa has been the focus of intensive attention since the first democratic elections in 1994. Not only does the sector offer the opportunity to enhance entrepreneurship amongst previously disadvantaged communities in South Africa; it is also seen as one that has the ability to absorb relatively more labour per unit of output than large-scale enterprises. One possible reason for the relatively higher labour absorption in the SME sector is that they pay relatively lower wages per worker. In order to investigate whether this is indeed the case and whether this has resulted in a relatively better performance by the SME sector in manufacturing, data is presented which offer a breakdown of key economic variables (value added, employment, wage bill etc) in the manufacturing sector by four size groups of enterprises: 1. small (employing 1-19 workers), 2. medium (employing 20-49 workers), 3. large (employing 50-199 workers), and 4. very large (employing more than 200 workers). The data are presented for four points in time spread over the period 1971-1996.