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Cape Town - In October there was a noticeable decline in South Africans' take-home pay, according to the latest BankservAfrica Disposable Salary Index (BDSI).
At the same time many more people are moving into the higher echelons of pay in SA, Mike Schussler, chief economist at economists.co.za, told Fin24 on Wednesday.
According to Schussler, the number of employees receiving over R50 000 in their bank accounts has more than doubled from 22 305 on average from August to October 2011, to 50 524 between August and October 2015 (excluding those earning over R100 000 plus a month).
"There is an amazing story here," said Schussler. "The economy is not creating work, but people in work are actually doing well."
The number of people receiving salaries of more than R50 000, but less than R100 000 per month has increased from 0.8% to 1.6% of the total number of people earning salaries in the data set. While this is only take-home pay as paid via the South African Payment system, it shows that - despite income tax increases, and above inflation medical insurance increases - the number of people taking home over R600 000 per year has doubled.
Similarly, the number of people who take home over R300 000, but less than R600 000 per year has increased from 5% to 8.4% of the total number of earners, while those taking home between R120 000 and R300 000 has increased from 26% to 38.4%.
Those with a disposable income between R120 000 and R1 200 000 per year has increased from 31.7% of the total number of earners in October 2011 to 48.4% in October 2015. This represents a 61% increase over four years and far exceeds inflation.
This obviously has resulted in higher tax collections as well as higher retail sales and explains why the upmarket retail figures continue to do well. The increase in the number of people earning over R120 000 indicates that despite slow economic growth the upper middle class is still increasing its ranks fairly well.Overall, the BDSI shows a decline of 2.1% in October 2015, after taking inflation into account. With inflation at 4.7%, the nominal increase of 2.5% in October 2015 over October 2014 means that there was a decline of 2.1% in formal sector salaries, as paid into people’s bank accounts.Considering the last four years of disposable salary data that is available, this is an unusual occurrence, as this is only the second time this year that disposable salaries have declined after inflation is taken into account.The reasons for this unusually low increase include higher than usual payments obtained in October 2014 as back pay from wage adjustments – for example in the metal industry – meaning that the base for the measurement is unusually high.The average salary was R12 840 in October, indicating a decline of R150 compared to the month before. This is likely an indication that many people are not able to earn extras such as overtime, work related bonuses or making targets for extra commissions.In contrast to the salaries this month, pensions continued to increase well above the inflation rate in October 2015, with the average disposable private pension increasing 9% on a year ago.The average pension was R5 946 in October compared to R5 947 in September.
