Should Cape Town companies pay higher salaries?

There is a general perception among many South Africans that they can earn higher salaries in Johannesburg than in Cape Town. Guy Lundy CEO of Accelerate Cape Town says although this is true to an extent, the issue is more complex.

“I do agree that there is an element that Cape Town companies do not pay as much as Johannesburg companies. Traditionally the reason is that people want to live in Cape Town, so they are willing to accept less,” says Lundy.

Lundy says addressing the issue is not as simple as expecting Cape Town companies to pay higher salaries. “One has to look at the cost of living in Johannesburg as opposed to Cape Town. If you’re in Johannesburg, yes your salary is higher, R150,000 compared to R120,000 in Cape Town, for example. But that additional R30,000 gets spent on your lifestyle. In Cape Town you don’t need the additional R30,000 to spend on your lifestyle.”

He adds that Cape Town companies, however, need to acknowledge that talent is mobile. “What has to be recognised is that in order to attract people who are not necessarily driven to move to Cape Town, you have to pay them more. I think that Cape Town companies can be very conservative in that way. They are sometimes willing to pay an expat from abroad more to come to Cape Town than they are willing to pay someone from Johannesburg, which is quite strange.”