How much South Africa’s rich have ‘suffered’ since 2011

On average, income per person in South Africa is estimated to have recorded very modest growth of 0.4% in real terms from 2011 to 2016, according to new earnings trend data from Standard Bank.

The Standard Bank Consumer Trends Report: 2016 uses data from the Bureau of Market Research (BMR), and was compiled by economists, Siphamandla Mkhwanazi and Kim Silberman.

Standard Bank found that total personal income is estimated at R3 trillion in 2016, up from R2.8 trillion in 2015, a nominal growth of 6.5% year-on-year.

With inflation of 6.3% in 2016, therefore, real growth in personal income in 2016 averaged 0.2% in 2016, which is not supportive of household expenditure, the report said.

Accounting for population size, an average adult South African was poorer in 2016 than in 2015. The 2016 adult population is estimated at approximately 39.7 million, from 36.3 million in 2011.

In real terms, Standard Bank noted that income per person is estimated to have declined by -1.3% y/y in 2016, from R76,578 to R75,541 per annum.

These declining income levels are against the backdrop of the challenging economic environment and are apparent across all income groups earning above R12,700 p.a.

Individuals in the lowest income group (R0-R12,700) are expected to have received a 2.2% real increase in income per person, while those in the highest income group (R1,698,001+) are expected to have become “poorer”, with income per person declining 8.8% in real terms between 2015 and 2016, the bank’s report said.

The report noted that since 2011, per capita income for the lowest income group has risen by 19% in real terms, from a low base of R807 to R989 pa. “The average income in this income group is subdued by the high number of people with no sources of income in SA, estimated to have been 41% of the adult population in 2016.”

This group accounts for approximately 50% of total adult population.

In the middle segment (Groups 3-5), income per person declined by an average 4.5% in real terms between 2011 and 2016, despite very little growth in the size of the segment.

The decline in income levels in these segments is primarily due to income growth that has not kept up with inflation, the report said.

Standard Bank’s data showed that 0.2% – 79,400 – of the working population earned a salary above R1.698 million annually, or R141,500 per month.

Only 1.1% of the working populations took home monthly earnings exceeding R65,000 per month, or R787,000 or more annually, while 3.3% took home a monthly salary of between R31,800 and R65,000.

In the affluent segments, real income per person declined significantly, by between 15% and 30% from 2011, Standard Bank said.

“The pace of income growth in these segments has not kept up with the pace of migration of the population, from lower income groups into affluent groups. Notwithstanding, the affluent segment still enjoys very high buying power,” the report said.

Income per person in Group 7 is estimated to have been R960,000 in 2016, down from R1.2 million in 2011 in real terms. Income per person in Group 8 is estimated at R4.53 million in 2016, down from R6.53 million in 2011 in real terms.

Standard Bank said that from BMR data it appears that government’s fiscal policy, which redistributes wealth and income via social grants as well as an increase in public sector employment via the expanded public works and other programmes, has made some progress with respect to reducing income inequality.


Read: How many SA households earn more than R200,000 per month

Latest news

Partner Content

Show comments

Follow us

Recommended