SA real salaries declined in the past 5 years

South Africans have seen their real salaries lag behind inflation by nearly four percentage points in the past five years, according to a report from payment services house BankservAfrica.

The report, which looked at data for the five years to February 2023, found the average nominal take-home pay in SA increased by 22.8% to R15 438, while core inflation rose came in at 26.6%.

Amid stress from the fallout from Covid-19 and Russia's invasion of Ukraine, South Africa's nominal average take-home pay fell behind the rising cost of living in 2022.

Independent economist, Elize Kruger, who compiled the report, said in a statement that the rising costs of production such as fuel, exacerbated by load shedding and wage demands, was creating a tough environment for salaried workers generally.

Many companies were also trying to quickly reduce their dependence on Eskom, with a "conservative survival" approach from companies not conducive to employment growth, she said.

With a weakening rand, more frequent load shedding anticipated this winter, and the possibility of further interest rate hikes, local companies could face even more cost pressures in the coming months. Many employers have already indicated that they plan to award 4% to 6% wage increases in the coming year.

"Over the past 18 months, the economic environment has been exceptionally challenging for companies," said Kruger.

"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 South Africa and also keeps a lid on salary increases," she added.-Fin24