[imagesource: YouTube / Bloomberg]
Inflation is when last month’s excuses – “sorry, money is super tight” – seep into the next month, and you have to aggressively re-budget so that you can make it to the next payday.
South Africans are struggling with rising inflation, where at times it feels like one needs to choose between a full fridge or a full petrol tank.
If your salary has adjusted to the current inflation rate, congrats. But for most Saffas, salary numbers have dipped by enough (in May 2022) to reflect one of the biggest annual falls on record.
That’s according to BankservAfrica Take-home Pay Index (BTPI) via BusinessTech, with the average take-home pay now on par with the level of August 2019.
To put it straight, people are feeling the strain and will continue to do so as higher food and fuel prices increase relentlessly, with the impact of the Russian invasion of Ukraine causing havoc.
Disposable income for who?
“The average real monthly salary was R14,696 in May and plummeted by 6.7% on a year-on-year basis,” said Shergeran Naidoo, BankservAfrica’s head of stakeholder engagements.
In nominal terms, the total take-home pay declined by 1.0% compared to a year ago. The average nominal salary was R14,817 in May, which was the lowest since July 2021.
Here’s a table to show the changes in the average take-home pay over the last 17 months:
While BankservAfrica data does in fact indicate that more people have been receiving salaries compared to a year ago, the unemployment rate remains dismal in the country, per Stats SA:
Year-on-year, the unemployment rate among young graduates (aged 15-24 years) declined from 40,3% to 32,6%, while it increased by 6,9 percentage points to 22,4% for those aged 25-34 years in Q1: 2022.
…South Africa has over 10 million young people aged 15-24 years and, of these, only 2,5 million were in the labour force, either employed or unemployed. The largest share (7,7 million or 75,1 %) of this group of young people are those that are out of the labour force (i.e. inactive). The main reason for being inactive is discouragement, i.e. they have lost hope of finding a job that suits their skills or in the area they reside.
I guess whatever you are earning, at least you’re better off than millions and millions of South Africans.
The bottom line in a country like South Africa is that there’s always someone you are better off than, and someone you’re worse off than.
[source:businesstech]
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