[imagesource:sowetan]

Although the term ‘middle class’ gets thrown around quite often, it’s not so simple to define who can really be called middle class in a country where the disparity between the haves and have-nots is so huge.

There’s not even an official definition of the middle class, and this is likely because determining who falls within the classification is challenging in the context of the whole population.

South Africa has an unemployment rate of 32.9%, and according to the statistics okes, earning R1 per month through some kind of work will slot you into the ’employed’ sector along with 16.2 million fellow Saffas.

For those lucky enough to have a job in the formal sector – which is often used as an indicator of the middle class – the average monthly salary in South Africa currently stands at R26,894.

If you earn this or above, congratulations, you made it. Sort of.

According to Stat Sa, this new average salary reflects a 2.3% increase from the same quarter in 2022 when it was R26,300. Several other agencies however rate a monthly salary of R22,000 enough to make you middle class, and according to the Bureau for Economic Research (BER), in its latest report on consumer confidence,  a household with earnings between R5,000 and R20,000 per month is also a middle-income household.

Discovery Bank, on the other hand, expanded this range slightly further, highlighting in its SpendTrend 2024 report that mass affluent (middle-income) individuals are those who earn between R100,000 and R350,000 a year, or roughly R8,000 to R29,000 per month.

As you may notice, there is some disagreement about who can really be seen as middle class. The only thing most ca agree on is that being labelled middle class doesn’t mean you are keeping your head above water. South Africans earning more than R20,000 a month are reaching record levels, but households are now spending two-thirds of their income paying off debt.

Since the beginning of the rate cycle in late 2021, interest rates have been raised by 425 basis points, making it increasingly challenging for middle-class South Africans to manage their loans, particularly those tied to their most significant assets, such as their mortgages and vehicle financing.

As someone who has as much understanding of finance as I have of string theory, it would appear that being middle class these days only means you have more access to debt, so our earlier congratulations might have been a tad premature. Rather, if you are a middle-class South African in 2024, please accept our sincere condolences.

[source:businesstech]