South Africans are taking home less in real terms – here’s what the average worker earns - IOL
Workers in wholesale and retail trade, construction and manufacturing earned less than the economy-wide average.
South Africans took home less money in August, with average net salaries slipping to R21,622 as inflation continued to eat into workers' spending power.
The average nominal net salary fell 0.1% from R21,662 in July, although it remained 1.9% higher than a year ago, according to the PayInc Net Salary Index. The index tracks the net salaries of about 2.1 million South Africans earning between R5,000 and R100,000 a month.
However, the decline was considerably steeper once inflation was taken into account. Real net salaries fell 0.5% month-on-month to R20,164 and were 2.6% lower than a year earlier.
Year to date, average net salaries were down 2.1% and 2.6% year-on-year in real terms, despite nominal salaries increasing by 1.6%.
“After increasing in July for the first time in nine months, the index declined by 0.5% in real terms,” independent economist Elize Kruger said. “For households, this erodes purchasing power, discretionary spending and confidence.”
The pressure on salaries comes as workers also face higher borrowing costs and the prospect of renewed inflationary pressure. PayInc said the benchmark interest rate was 0.5 percentage points higher so far this year, adding to the strain on household budgets.
PayInc said renewed conflict in the Middle East was expected to push headline inflation above 5% in October and keep it elevated for several months. “This expected upward trend and the risk of rising inflation expectations have triggered another interest rate hike," Kruger said.
The average nominal net salary fell 0.1% from R21,662 in July, although it remained 1.9% higher than a year ago, according to the PayInc Net Salary Index.
The national averages also mask substantial differences in what South Africans earn depending on where they work.
Statistics South Africa's latest Quarterly Employment Statistics showed average monthly gross earnings in the non-agricultural formal sector were R32,828 during the first half of the year.
Workers in wholesale and retail trade, construction and manufacturing earned less than the economy-wide average.
Most of the remaining sectors recorded average monthly earnings of between R37,107 in transport and communication and R39,492 in community, social and personal services.
However, electricity, gas and water workers were considerably ahead of the pack, earning an average R62,454 a month – about 90% more than the economy-wide average.
Eskom's own figures showed its average employee earned R941,933 a year, or R78,494 a month, while the median was R858,580 a year, equivalent to R71,548 a month.
Earnings in the electricity and water sector also increased 9% in the first half compared with the same period last year, against economy-wide growth of 5.3%. Financial services workers recorded the lowest increase at 3.5%.
“The sector differences show that salary earners are experiencing the current economic environment very differently,” Kruger said. “But the broader PayInc Net Salary Index points to continued pressure, with rising inflation likely to delay a recovery in real purchasing power.”
