South Africa\u2019s take-home pay for July reflected a 0.3% real month-on-month improvement due to salary adjustments and back payments for public servants, according to BankservAfrica\u2019s monthly Take-home Pay Index in July.<\/p>\n
Meanwhile, BankservAfrica’s Private Pensions Index (BPPI) showed average increases at its strongest levels since 2012.<\/p>\n
The public services\u2019 salary agreement with government together with the increases arising from the back payments on April 1, 2018 both had a positive impact on take-home pay.<\/p>\n
“Real take-home pay reached R14,076 in July<\/strong> from R13,611 in June,” said Shergeran Naidoo, head of stakeholder engagements at BankservAfrica. “This means that the average take-home pay reached R14,828 in nominal terms<\/strong> at the end of July 2018.”<\/p>\n “The increase to take-home pay comes in spite of the fact that inflation jumped from 4.6% in June to 5.1% in July,” said Mike Sch\u00fcssler, chief economist at Economists dot coza, adding that, should inflation stay below the 5.5% mark, take-home pay will remain above inflation for a while \u2013 even if other sectors of the economy are not getting more than 5.5%.<\/p>\n These increases should help retail sales recover a little, but also could lead to the higher importation of consumer goods, he said.<\/p>\n The BankservAfrica Take-home Pay Index uses a three month moving average and considers the lagged pay increases from other employers, which affects the movement of the overall index.<\/p>\n This includes municipal employees who received a 7% increase, which will be implemented in August with increases backdated to 1 July 2018.<\/p>\n Municipal workers earning less than R9,000 at municipalities will also get an additional 0.5% increase in October 2018. This also extends to Eskom\u2019s recent settlement for a 7.5% increase, some of which will be back paid.<\/p>\n Moreover, one-time bonuses of R10,000 will also be paid to the 38,000 bargaining unit employees. With the mining sector also negotiating at around 6%, it looks likely that some delayed increases will still impact the BankservAfrica Take-home Pay Index, which tracks formal sector take-home pay, the group said.<\/p>\n According to Sch\u00fcssler, the average take-home pay in the formal sector should remain above the inflation level for the next few months.<\/p>\n Although the average month equivalent of the number of employees has remained over three million on a three month moving average for 40 months, there does seems to be a declining trend as four out of the last five months have seen decreases in the number of employees, he said.<\/p>\n “While the BankservAfrica system is not able to measure employment gains and losses, it does appear that some reduction in employee numbers may be taking place.”<\/p>\n “It appears the declines in take-home pay…led retail slumps, while increases in take-home pay have had a more immediate impact. This may be due to consumers not wanting to lower their lifestyles but upgrading their lives as soon as there is money in the bank,” Sch\u00fcssler said.<\/p>\n
\n