Data from the 2022 World Inequality report shows that South Africa remains one of the most unequal countries in the world.
According to the report, while the bottom 50% of working adults earn roughly R12,300 a year, the top 10% earn more than 60 times that at around R780,300.
“Today, the top 10% in South Africa earn more than 65% of the total national income and the bottom 50% just 5.3% of the total,” said the World Inequality Database.
The report showed the following breakdown of average income needed and average wealth:
|Income per year
|R2 584 000
|R16 884 350
|R2 628 650
|– R15 200
Estimates suggest that income inequality has been extreme in the country throughout the 20th and 21st centuries – the bottom 50% of the total population has never captured more than 10% of the national income.
The government has not sufficiently implemented enough strong structural economic reforms to lift the country out of the effects of extreme economic inequalities as a result of apartheid, the group said.
Wealth distributions follow a similar trend line to income, with the richest South Africans boasting levels of wealth comparable to Europeans. The bottom 50% of the population, yet again, is far worse off with no wealth at all.
These figures paint a picture of the majority of South Africans living hand-to-mouth with more liabilities than assets, servicing debt each month without a cent to save.
The founder of National Debt Advisors, Sebastien Alexanderson, said that thousands of South Africans are living outside of their means, over-indebted and posing a risk to the financial health of many people.
“The average South African is spending up to 75% of their disposable income on debt repayments – a 5% increase from the long-term average of 70% as reported by the South African Reserve Bank.”
Average take-home pay
Recent take-home pay data from BankservAfrica shows that rising inflation and its effects should start to ease towards the end of this year, with the average nominal salary (after deductions) recovering to R14,688.
Take-home pay saw its highest point in February of this year at R15,614 – still 1% lower than the year before. According to BankservAfrica, headline inflation has continued to sit ahead of salaries.
The average nominal salary already puts an employee outside of the majority of South Africans by R2,338. However, when compared to how much one must earn to be considered in among the uber-rich – this salary is millions behind.
The World Inequality Lab has a free-to-use tool that simulates how your household income compares to other South Africans. If one was earning the average nominal take-home pay of R14,688, they would be among the top 18% of the country.
To be in the top 1%, however, the lab points to an annual income of R1.81 million as being the threshold, or R151,500 per month.