Take-home pay has shrunk since 2022

• Job market and salary adjustments likely to remain lacklustre for rest of the year, warns independent economist

People earned less in April than a year ago amid dismal economic conditions and higher unemployment, according to the latest BankservAfrica’s takehome pay index. April’s data shows how various factors, including persistently high inflation, interest rate hikes and ongoing load-shedding, are adding to the pressure on consumers, with the average nominal take-home pay declining 4.2% year on year.

People earned less in April than a year ago in dismal economic conditions and higher unemployment, according to the latest BankservAfrica take-home pay index.

April’s data shows how various factors, including high inflation, interest rate hikes and load-shedding, add to pressure on consumers, with the average nominal take-home pay falling 4.2% year on year to R14,534 a month from R15,170.

“With little indication of a different economic environment in 2023 and 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,” said independent economist Elize Kruger. “This is a scenario that could only exacerbate the unemployment crisis.”

The automated payments clearing house expects the environment to remain unfavourable for comfortable wage increases or job creation.

Organisations will probably “remain in ‘survival model’ for an extended period”.

Kruger said that in real terms the average monthly salary fell more than a tenth year on year to R13,524, if the eroding effect of inflation on the purchasing power of consumers is taken into account.

Headline inflation eased slightly to an annual rate of 6.8% in April, offering some reprieve, but the rapid recent depreciation of the rand could “throw a spanner in the works”, she said.

The rand touched a record low of R19.86 against the dollar on Tuesday as SA’s foreign policy on Russia remains under fire and the International Criminal Court (ICC) confirmed Pretoria is obliged to arrest Russian President Vladimir Putin if he shows up for the Brics summit in Johannesburg in August after the court issued a warrant for his arrest.

International relations & cooperation minister Naledi Pandor on Tuesday declared diplomatic immunity for attendees of both the Brics foreign ministers’ meeting in SA starting on Thursday and the Brics annual summit in August, potentially opening the door for Putin to attend.

Though SA officially claims neutrality on Russia’s invasion of Ukraine, the US has accused SA of supplying it with weapons —a claim the government denies.

Still, the country could face sanctions from the West, which would further hobble the economy if the claims are proved.

THE RAPID RECENT DEPRECIATION OF THE RAND COULD THROW A SPANNER IN THE WORKS

THIS IS A SCENARIO THAT COULD ONLY EXACERBATE THE UNEMPLOYMENT CRISIS