Data from the latest BankservAfrica Take Home Pay Index (BTPI) reveals a somewhat surprising finding: the average salary in South Africa has not changed compared to a year ago.
The automated clearing house noted that in July 2021, the real average salary was R12,129 for the month, which is R2 more than the average salary in July 2020.
This is, however, R383 lower than the June 2021 average. The nominal average take-home-pay for July declined a fraction from the prior month to R14,620.
BankservAfrica pointed out that average salaries during the height of the Covid-19 first wave ended up higher than usual. Lower paid casual workers bore the brunt of the cost-cutting by large companies at that stage, while higher-paid monthly employees did not suffer the same level of reductions.
“So, in that context, the average take-home pay for July 2021 is robust, despite staying on the same level. The number of people receiving a paycheck did not change significantly between June and July either. The monthly equivalent number of payments made declined by less than -0.1% and by R1,092 in value from June 2021,” the group said.
Another influence on the July 2021 figures is the decade-low that the BTPI reached in July 2020 due to the Covid-19 crisis.
To illustrate the extent of this, the number of working people increased by 41% in July 2021 due to July 2020 being the lowest point of the Covid crisis, BankservAfrica said. Employment and salaries lag economic and political events on the ground, it said.
As a result, job losses or temporary non-payments from the looting or riots will likely reflect over the next month or two.
“Another factor at play is that the overall number of people paid via the National Payment System operated by BankservAfrica is well above last year’s – but still below July 2019.
“However, as the July 2019 data represented part of the General Elections from May 2019 – when more temporary employees were employed to manage the countrywide voting – this figure is not a meaningful comparison. July 2021 is above the numbers processed in 2018 but below that of 2017’s,” the group said.
BankservAfrica said that by July 2021, the total number of paychecks processed were close to normal as there were no major external events.
“Overall, our July 2021 BTPI data does not record the impact of the riots on the number of salaries paid, showing that salaries are indeed a lagging indicator – even for retail sales.”
Pensions soar to double the inflation rate
For the ninth month in a row, average real pensions rose at double the inflation rate, according to the BankservAfrica Private Pensions Index (BPPI). Inflation rose by 4.6% in July compared to a year ago. However, pensions after inflation rose by 5.6%.
At present, the only way of explaining this is that lower-income pensioners are applying the new rule changes, which allows pensioners with less than R247,000 in their retirement fund to withdraw their remaining money, said BankservAfrica.
“This has led to many exiting the pension system. In the last nine years, the average number of pensioners per month was 665,000. In the last three months, this number has dropped down to 640,000. The number of private pensioners has now declined to below the nine-year average,” it said.