daniel chigunwe
Average salary increases in South Africa are failing to keep pace with inflation as low economic growth, high unemployment and the fallout from the coronavirus pandemic impact on the labour market, a BankservAfrica report released on Wednesday shows.
The average nominal salary measured in the BankservAfrica Take-home Pay Index rose to R15 438 in February 2023, from R12 573 five years earlier. The 22.8 percent increase lagged a 26.6 percent rise in the consumer price index. The number of salaries paid in South Africa rose by just 455 140 over the period.
“Between 2018 and 2021, the nominal take-home pay kept up with inflation,” said Shergeran Naidoo, BankservAfrica’s head of stakeholder engagements. “However, in 2022 it took a turn for the worse as the nominal average take-home pay stagnated, falling behind the rising cost of living.”
The situation for 2023 remains bleak, with little room for salaries to rise substantially unless the economic outlook significantly improves, according to the report.
Power cuts, known locally as load shedding, escalating fuel prices, and rising wage pressures have made it “exceptionally challenging” for companies over the past 18 months, according to independent economist Elize Kruger.
That’s forced them to shift from potential expansion and investment to self-sufficiency, further exacerbating joblessness, economic stagnation and workers’ bargaining power, she said.— Bloomberg
Bongani Ndlovu