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Cape Town - Average real disposable salaries in South Africa still remain below their previous high of R14 212 in October 2015.
In August this year, salaries were around R13 900.
This decrease was mainly due to the high inflation in 2016 and low increases in salaries during 2016 and the beginning of 2017, according to the latest BankservAfrica Disposable Salaries Index (BDSI) and BankservAfrica Private Pensions Index (BPPI) released on Thursday.
Real increases in both salaries and pensions may have seen their highest increases earlier this year when increases of about 2.5% (salaries) and 3.7% (private pensions) were obtained respectively, according to Mike Schüssler, chief economist at Economists dotcoza.
The average take-home pay that employees below R100 000 per month received was R14 106 in nominal terms during August. Pensioners got paid R6 759 in their bank accounts on average in August - also in nominal terms.
The median disposable salary as measured within the SA payments system remains above 75% of the average disposable salary for the second month in a row.
This trend could be an indication of a narrowing of the wage gap in the formal sector outside of executives, according to the index report.
Both indices also indicate that the positive increase in real retail sales and overall consumer spending may be more sustainable than earlier this year.
Increases
Both salaries and pensions continued increases above the rate of inflation for the sixth consecutive month.
The data indicates that salaries increased by 1.1% on average (after inflation) on a year ago, while pensions increased by 0.9% in real terms.
While both increases are lower than the previous few months, it is partly due to a slightly higher rate of inflation in August, according to the index report.
"The sustained real increase may decline a little as inflation ticks up for a month or two on the back of higher oil prices, but present trends indicate average salary and pension increases as paid into people’s bank accounts," the report explains.
Pensions
Pensioners have in general fared better than salary earners when looking at the percentage increase. However, pensioners receive less than half the level of income than formal sector employees.
Both the average and the median income of pensioners have shown increases above that of employees as paid by their employers.
The data from BankservAfrica shows that in real terms pensioner take-home income was only R9 below the record set in April this year. The average pension remains at just over 48% of average disposable salaries.
"It is likely that pensioners will not see as high an increase in future because a large part of their pensions are in money market instruments as well as property funds," states the report.
"Both of these investments are likely to have a slightly lower return than before."
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