Global Courant 2023-05-31 13:34:56
BankservAfrica’s monthly index shows that net pay has fallen below last year’s level
The overall depressed economic environment contributed to the average nominal take-home pay falling further in April 2023, according to the monthly BankservAfrica Take-home Pay Index (BTPI). The number of wage payments has also fallen, pointing to a turbulent labor market.
“The average nominal take-home pay was R14 534, a significant drop from the R15 170 recorded a year ago,” said Shergeran Naidoo, Head of Stakeholder Engagements at BankservAfrica.
As businesses come under pressure from heavy tax cuts, high production costs, rising interest rates and declining demand, the climate remains unfavorable for comfortable wage increases or job creation. Organizations are likely to remain in the ‘survival model’ for an extended period of time.
Independent economist Elize Kruger adds that the BTPI has also fallen in real times as inflation remains high, further eroding the purchasing power of average salaries. In real terms, the average salary was R13 524, down a whopping 10.4% from a year earlier.
Despite headline inflation falling to 6.8% year on year in April and forecasts suggesting that prices would moderate more quickly in the coming months, the recent depreciation in the rand exchange rate could throw a spanner in the works if the rand remains at its current weaker level. stays for a longer period.
After two consecutive months of moderate increases in the number of salaries deposited into South Africans’ bank accounts, BankservAfrica data – adjusted for weekly payments – suggests that more than half of those gains were reversed in April, with 123,000 less paid. salaries.
“The South African labor market is still recovering from heavy job losses due to the impact of the Covid-19 pandemic, a challenge amid South Africa’s low growth,” notes Kruger. Moreover, South Africa is not only catching up, but also has to accommodate the constant growth of the working population.
“With little indication of a different economic climate in 2023, but an even lower economic growth forecast for 2023 compared to 2022, the labor market – and salary adjustments – are likely to remain lackluster for the rest of the year. This is a scenario that could only exacerbate the unemployment crisis,” said Kruger.
Average private pensions, as measured by the BankservAfrica Payments Pensions Index (BPPI), continued to reflect good growth.
“In nominal terms, the average private pension of R10 305 showed monthly improvement and growth of 6.4% year-on-year,” notes Naidoo. The real average private pension stood at R9 401 in April, slightly down from a year earlier, but still a signal that pensioners’ purchasing power has been preserved amid high inflation.
