The average monthly take-home pay in South Africa increased 3.1% in April 2021 as more signs point to post-lockdown economic recovery in South Africa, the latest BankservAfrica Take-home Pay Index (BTPI) shows.
After inflation, the average take-home pay was R12,958 in real terms in April 2021. The average salary increased by 6.8% year-on-year in nominal terms to reach R15,083 in April 2021.
Although this reflects a robust recovery for salaries, one must remember this upturn comes off the low base in April 2020 when strict lockdown restrictions affected industries and salary numbers across the board, BankservAfrica said.
“The majority of businesses had to adjust their operations, or shut down,
leading to big payment losses for overtime workers,” it said.
“Although reports of job losses and temporary pay suspensions surfaced in April 2020, the pandemic induced changes for salaries and retrenchments only became evident in the months that followed. April 2020 also recorded a decline in average salaries compared to April 2019.”
Salaries still normalising
BankservAfrica said that the April 2021 data shows the formal sector labour market, or private sector is still ‘normalising’ in salary and employment terms.
“Although our data cannot project the unemployment rates, we are convinced that large private sector employment is close to recovery at 95%.
“We believe the number of large private sector employment are returning to levels before the pandemic.”
Due to the hard lockdown and the government’s financial assistance to affected salaries, retail sales and other consumer consumption measures will reflect more changes than total salaries, it said.
The group also attributed the monthly salary increase to a likely decline in temporary workers contracted on an ‘as and when basis’ by larger firms in 2020.
It is also possible hourly and part-time workers were paid less, which increased the average and even the median take-home pay tracked in the BTPI for April 2021, BankservAfrica said.
“The typical take-home pay increased by 2.2% after inflation. The ‘typical’, also known as ‘median’ is the middle of the overall take-home pay.
“It is not influenced by the number of few well-paid people or decline in the number of temporary workers paid. Therefore, the ‘typical’ represents a better reflection of actual salary trends at present.
“The total value of all salaries paid rose by 4% in real terms in April 2021. But, as a year-on-year comparison – and with the knowledge that the conditions hit some harder than others – it is not a real indication of current economic trends.”