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SA salary growth hits record low

Sep 25 2019 14:05

South African workers are seeing meagre pay increases that do not keep up with inflation, according to the SA Reserve Bank’s quarterly bulletin, released on Wednesday.

Private sector workers saw their pay grow by only 1.0% - an all-time low - in the first quarter of 2019, compared to the year before. This is far below inflation, which measured 4.3% in August. This means wages are not keeping pace with inflation and living costs are rising faster than salaries.

The first quarter of 2019 is also the third successive quarter of shrinking nominal remuneration growth. After reaching 5.1% in the second quarter of 2018 it has all been downhill. 

The Reserve Bank said bonus and overtime payments were “significantly” lower in the financial sector, which contributed to shrinking remuneration per worker at SA’s banks and insurers. In addition, wages in the gold sector also shrank due, in part, to a protracted strike at Sibanye-Stillwater.

Wage hikes for those who are part of collective bargaining agreements decreased to their lowest levels since the second quarter of 2007 in “an environment of weak output and employment growth,” the central bank said.  The economy also entered its 70th month of a weakening cycle in September, its longest downward cycle since 1945, the bank reported.

sarb wages

Quoting figures from labour research group Andrew Levy Employment Publications, the average wage hike as a result of collective bargaining was recorded at 6.9% in the first half of 2019 - the lowest level in 12 years. The average wage hike last year, by contrast, was 7.2%. 

Nominal remuneration in the public sector, meanwhile, grew by 10% in the first quarter of 2019, up from 7.0% in the fourth quarter. “However, when excluding election-related outliers, public sector wage growth per worker remained broadly unchanged, accelerating marginally from 7.0% to 7.1% over the same period,” the Reserve Bank said.  

The Reserve Bank noted that the number of working days lost due to strikes doubled to 1.1 million in the first half of 2019, from 550 000 in the first half of 2018. In total, 1.95 million working days were lost to strikes in 2018.

Ongoing wage negotiations in vehicle manufacturing and platinum mining could impact the number of working days lost in coming quarters, given the history of strike action accompanying past negotiations in these industries, the bank said.

sa reserve bank  |  sarb  |  sa economy


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