The latest BankservAfrica report released on Wednesday shows how the challenging economic environment in SA has negatively affected salaries since 2018.
According to the report, the average salary in SA has weakened as a result of the underperforming economy, high unemployment rate, soaring inflation and the effect of the Covid-19 pandemic.
The five-year take-home pay report shows average nominal salary, which excludes the effects of inflation that increased to 7.1% in March, increased from R12,573 in February 2018 to R15,438 in February 2023, showing growth of 22.8%.
“In contrast the consumer price index (CPI) increased by 26.6% over the same period, confirming that nominal take-home pay has lagged on developments in inflation,” BankservAfrica’s head of stakeholder engagement, Shergeran Naidoo, said.
The report shows even though the nominal take-home pay kept up with inflation between 2018 and 2021, the trend took a turn for the worse in 2022.
“Nominal average take-home pay stagnated, falling behind the rising cost of living,” economist Elize Kruger said.
“Over the past 18 months, the economic environment has been exceptionally challenging for companies. The rampant load shedding, high production costs due to escalating fuel prices, weaker currency and rising wage pressures, elevated interest rates and moderating demand have all contributed to the dismal growth,” Kruger added.
She said this is because companies have indicated a shift from potential expansion and investment to becoming less dependent on Eskom, and have redirected capital earmarked for investment towards self-sufficiency.
“This conservative survival approach is not conducive to employment growth in SA, and also keeps a lid on salary increases,” she said,
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