People’s Salaries Are Not Keeping Up
Data from the BankservAfrica Take Home Pay Index earlier this year indicates that the mysterious “average” earner has not seen a meaningful real world increase and compared to inflation has actually seen a 5.2% drop in income.
This lines up with information recently released by debt counselling practice Debtbusters during their promotion of Debt Awareness Month. They confirmed that consumers they are helping are basically losing around 5% verse inflation each year.
In the chart below you will see that those on the “average” private pensions fare slightly better but the “average” South African earner who gets a salary of R15 542 and takes home R12 463 of that salary is losing buying power as the price of everything else around them is going up. Debtbusters statistics show that these consumers are probably using +-R8000 towards their debts each month and using their lines of credit to stay afloat each month. They are effectively trapped in a downwards debt spiral as the fees and interest portion of their debts slowly grows and grows. This means they are slowly getting deeper and deeper into debt.
Image source: BankserveAfrica Take Home Pay Index
