The recent BTPI shows a 6.9 percent decline in South African salaries in real terms.
Although employment levels improved, and over a million more salaries were paid in 2022, there was a decline in real average salaries last year.
This is according to the latest BankservAfrica Take-home Pay Index (BTPI), which shows that the average nominal take-home pay in 2022 was R15,055 per month, compared to R15,166 in 2021.
December 2022 offered particularly disillusioning compensation data.
Shergeran Naidoo, BankservAfrica’s head of stakeholder engagements, said, “At R14,633, the average nominal take-home pay was 4.8 percent lower than the R15,403 reflected in the previous year.”
According to the South African Reserve Bank, growth in the nominal remuneration per worker in the private sector remained unchanged at 5.7 percent year-on-year, while the average wage settlement rate in collective bargaining agreements came to six percent in the first nine months of 2022. Inflation last year reached a 13-year high of 6.9 percent.
This provides evidence that nominal wage increases lagged on actual inflation trends during 2022 and thus even more so in real terms, which is confirmed by BankservAfrica’s data that reflected a 6.9 percent y-ear-on-year decline in the real average salary recorded in 2022, compared to 2021.
On the plus side, employment levels picked up last year with 1.072 million more salaries being paid compared to the previous year.
Economist Elize Kruger said, “A phenomenon noted throughout 2022 – and reflected in December’s data – is that there was often an inverse correlation between the number of salaries paid and the average value of salaries, suggesting that the bulk of the new opportunities were likely created in the lower income categories. This probably ties in with a demand for temporary and seasonal workers during the festive season.”
Looking at the economic prospects that lie ahead, there are many indications that this year
will offer more of the same.
Elize added, “The ongoing energy supply problems, in addition to elevated input costs, rising interest rates and increasingly higher wage demands, are placing downward pressure on company profits and margins. Furthermore, a less favourable global economic backdrop adds to the economic challenges for many sectors.”