The overall dismal economic environment has contributed to the average nominal take-home pay slipping further in April 2023, according to the monthly BankservAfrica Take-home Pay Index (BTPI). The number of salary payments has also fallen, signalling a troubled job market.

“The average nominal take-home pay was R14 534, showing a sizeable decline on the R15 170 recorded a year ago,” comments Shergeran Naidoo, BankservAfrica’s head of stakeholder engagements.

As companies come under strain from the harsh load shedding, high production costs, rising interest rates and moderating demand, the environment remains unfavourable for comfortable wage increases or job creation. Organisations will likely remain in ‘survival model’ for an extended period of time.

Independent economist, Elize Kruger adds that the BTPI has also declined in real times as inflation remains at elevated levels, further eroding the purchasing power of average salaries. In real terms, the average salary was R13 524, declining by a notable 10,4% from a year earlier.

Despite April’s headline inflation lowering to 6,8% year-on-year and forecasts suggesting prices could moderate at a faster pace in the coming months, the recent depreciation of the rand exchange could throw a spanner in the works if the rand remains at current weaker levels for a prolonged period.

After two consecutive months of moderate increases in the number of salaries paid into South Africans’ bank accounts, BankservAfrica’s data – adjusted for weekly payments – suggests that more than half of these gains were reversed in April with 123 000 fewer salaries paid.

“The South African job market is still recovering from heavy job losses incurred from the impact of the Covid-19 pandemic, a challenge amid the low growth reality in South Africa,” notes Kruger. Furthermore, South Africa is not only in catch-up mode, but must also accommodate the constant growth in the working age population.

“With little indication of a different economic environment in 2023, but an even lower economic growth forecast for 2023 compared to 2022, the job market – and salary adjustments – are likely to remain lacklustre for the remainder of the year. This is a scenario that could only exacerbate the unemployment crisis,” states Kruger.

Average private pensions, measured in the BankservAfrica Payments Pensions Index (BPPI), continued to reflect good growth.

“In nominal terms, the average private pension at R10 305 showed a monthly improvement and a 6.4% year-on-year growth,” notes Naidoo. The real average private pension was R9 401 in April, marginally lower compared to a year earlier, but still signalling that the purchasing power of pensioners has been preserved amid the high inflation environment.