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Cape Town - Hold on to your formal sector job if you still have one, Mike Schüssler, chief economist at Economists dotcoza, told Fin24.
He was commenting on the latest BankservAfrica Disposable Salary Index (BDSI) released on Wednesday. It shows that average salary growth has declined slightly to 6.6% in September. This was as the large back pay of civil servant salary increases abated.
Another factor impacting the reduced disposable income reflected in the BDSI are higher taxes after the government back payments have been taken into account. Medical insurance and other deductions often also increase when salaries go up, but can be delayed by a month or two. This then decreases take-home pay a few months after the actual increases have taken effect.
Salaries are still up nearly by 2% in real terms as inflation remained steady at 4.6% in September. The average disposable salary was about R120 lower than in August, reaching R12 989 for September 2015. The typical salary increased 8% over the last year. The data shows that salary increases were higher in the middle of the salary spectrum. This was up by 3.2% in real terms. The median or typical salary is inching closer to R10 000 per month, but is currently at R9 718.
READ: Take-home pay still way above inflation
"Yes, I am gloomy about job prospects, but for those in jobs the BDSI shows they tend to still get increases which outpace inflation. People are always negative about their salary increases, but those of us genuinely in a formal sector job have been doing OK and generally keeping up with inflation in terms of increases in our disposable income," said Schüssler.
"Salaries are very likely to show slower growth over the next few months as, apart from the December bonuses, most of the salary increases are now paid."
It is still expected that the typical disposable salary paid via BankservAfrica will be more than R10 000 by early 2016. Therefore, Schüssler foresees retail sales continuing to be the highest growing part of the economy for another month or two.
At the same time he finds it incredible that the average private pension growth has outpaced average disposable salary growth for 10 months in a row. The median private pension has done the same over typical disposable salary growth for nine months running - in nominal and real terms.
"For pensioners it has been a good story, but I don't know how long it will continue," said Schüssler.
In his view one reason for the better growth in private pensions than in disposable income, could be the impact of lower interest rates in South Africa. That caused pensioners to put more money in equity and government bonds and along with the greater risk, they got a greater reward.
READ: Salary increases better spent on retirement - expert
"We know there are between 10 million and 11 million people in the formal sector in SA and about 800 000 receiving private pensions. These people have the most spending power in the country - although there could be exceptions in the informal sector of course," said Schüssler.
Private pensions increased by an average of 10.1% in September, while the typical private pension increased by 10%. However, Dr Caroline Belrose, head of fraud and data analytics at BankservAfrica, cautioned that average private pensions remain at only 45.8% of the disposable salary and average at R5 946 per month.
The typical pensioner only gets 40.6% of the typical disposable salary. The median pensioner received R3 946, which is R2 000 less than the average. She expects the R4 000 level to be breached in the next month or two.
“While employment may be under pressure, salaries being paid via the central South African Payment System show that increases are still relatively good, given the poor economic conditions in the country,” said Belrose.
