How much money you need to be middle class in South Africa

 ·3 Feb 2016
BEE Affirmative Action

There are a number of different theories defining the middle class, and how much one needs to earn to fall into that category.

The dictionary defines the middle class as the socioeconomic class between the working class and the upper class, usually including professionals, highly skilled laborers, and lower and middle management.

These people are vital  to economic growth – they are highly-skilled professionals who  generate higher per-capita GDP, while also forming a solid consumer base to drive productive investment. In short they are cash cows.

It is reasoned that a well educated middle class creates better governance.

In South Africa, economist Justin Visagie describes the middle class as a household of four persons with a total income of between R5,600 and R40,000 per month after direct income tax.

Visagie said in a research paper in 2013, that in South Africa, thinking about what it means to be middle class is complicated by the low average and median levels of incomes in the country and the very wide distribution of income.

According to BankservAfrica, the largest automated clearing house and payments system operator in the country, the average monthly take-home salary in SA in 2015 was R12,715.

Unilever Institute consultant Paul Egan said that the country’s middle class is still very small –  70% of the population still live in households earning less than R6,000 a month.

A report published by Credit Suisse in 2015 found that middle class South Africans account for 13.7% of the adult population in the country.

Credit Suisse however, defines the middle-class in terms of a wealth band instead of an income range and uses the US as the benchmark country where a middle-class adult is defined as having wealth between $50,000 and $500,000 valued at mid-2015 prices.

South Africa is believed to have a fraction more than 4.3 million middle class citizens, using Credit Suisse’s criteria.

John Simpson, director of the University of Cape Town’s Unilever Institute of Strategic Marketing, defines middle class South Africans as those who earn between $1,550 and $4,800 per month or who meet certain criteria, for instance, having a white-collar job and owning a car.

In accordance with this measure, an article published by the United Nations put the country’s black middle class at 4.2 million citizens in 2012, just over 50% of people in that group.

Research conducted by the UCT Unilever Insitute of Strategic Marketing found that the country’s black middle class had more than doubled, from 1.7 million in 2004, to an estimated 4.2 million by 2012.

More on South Africa

This is what the middle class in South Africa looks like

Black middle class on the rise in South Africa

Black surpasses white middle class in SA

SA middle class forced back into poverty?

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