SA salaries are edging closer to pre-pandemic levels, adding further evidence to signs the economy is gradually recovering from the devastation caused by Covid-19 and consequent lockdowns during 2020.
The BankservAfrica take-home pay index (BTPI), which analyses pay for people employed at large SA companies, shows nominal, average, take-home pay rose to R15,083 in April, up 6.8% from the same month in 2020. However, that’s still marginally below the R15,150 nominal, average, take-home salary recorded in January 2020, roughly two months before SA went into its first hard lockdown.
Nominal take-home pay refers to the actual amount paid into an employee’s bank account while real take-home pay reflects adjustments for the impact of inflation. BankservAfrica said the companies included in the survey were typically larger entities employing more than 100 people, which would justify the use of automated payroll systems. The companies spanned both the public and private sector.
“Our April data, which underrepresents small firms and does not measure the informal market, shows the private sector is normalising in salary and employment terms,” said Mike Schüssler, an independent economist who conducted the research for BankservAfrica using salary data processed by the company, which is Africa’s biggest, automated payments, clearing house.
“Although our data cannot project the unemployment rates, we are convinced that large, private-sector employment is close to recovery at 95% and returning to levels before the pandemic,” said Schüssler.
SA suffered its worst economic contraction in 100 years in 2020 after a series of socioeconomic lockdowns to curb the spread of Covid-19 by shutting mines, factories, restaurants and other places of work, resulted in GDP contracting by 7%. That resulted in an employment bloodbath that saw the economy shed more than 1-million jobs on a net basis in 2020, pushing unemployment to 32.5% in the final quarter of that year.
BankservAfrica’s data shows that take-home pay after accounting for the effects of inflation rose only moderately to R12,959 in April, up a mere 3.1% from the same month in 2020. However, that was still 0.8% lower than the average, after-inflation, take-home salary of R13,064 recorded in January 2020, just prior to the onset of the pandemic in SA.
“April to July 2020 were very unusual months for salaries and pensions. Therefore, the year-on-year changes do not reflect a normal trend but indicate a recovery, though less than household spending will reflect in the coming months,” said Schüssler.
BankservAfrica’s payments data showed that private pension contributions rose in both nominal and real terms in April when compared to the same month in 2020.
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