South African Workers Feel the Squeeze as Household Costs Rise Faster Than Salaries
- In 2025, with the economy expected to grow by less than 1%, salary increases are doing little to ease the financial strain on South Africans
- Household costs are outpacing what many workers are earning in South Africa
- South Africa’s export industries are facing growing pressure as new tariffs from key trading partners, including the US, begin to bite
- Dr Chris Blair, Group Director at 21st Century, spoke to Briefly News about why salary increases in South Africa are failing to keep pace with the soaring cost of living
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Imagine being a factory worker in Johannesburg, trying to make ends meet on a small salary. Your rent’s gone up again, electricity costs more every month, and even basic foods like maize meal feel unaffordable. You hear about a salary increase, but when it arrives, it barely covers last month’s groceries.
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Economy growing by less than 1%
For millions of South Africans, this is not just a story; it’s everyday life. In 2025, with the economy growing by less than 1%, rising prices, high unemployment, and mounting government debt are making it harder for ordinary people to get by.
Dr Chris Blair explained that living costs are rising faster than most salaries, hitting low-income earners hardest. Even though inflation is around 3.5%, essentials like electricity, food, transport, and data are still getting more expensive. Municipal electricity bills have risen by over 11% in 2025/26, putting extra pressure on households. People are now spending a larger part of their income on basics, with food and drinks taking up nearly a fifth of their budget. For many, this means tough choices, like deciding between petrol and school uniforms for their children.
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Blair said that low-income earners, such as domestic workers, retail staff, and informal traders, are feeling the squeeze the most. Wages in these sectors have barely moved, while inflation has eaten away at purchasing power. He explained that between 2020 and 2025, salaries grew by around 25%, but inflation rose by 28%, leaving many worse off in real terms. People are running harder just to stay in the same place.
High unemployment in SA
Blair stated that salary increases often lag behind rising costs, especially for those supporting extended families in a tight job market. While overall salary budgets in Africa are expected to rise by about 6.7% in 2025, this average hides the struggles of lower earners, whose pay hikes often fall short of inflation.
Blair pointed out that high unemployment makes the situation even worse. South Africa’s unemployment rate reached 33.2% in the second quarter of 2025, with the expanded rate, including those who have stopped looking for work, at 42.9%. Youth unemployment is especially severe, hitting around 46% for people aged 15–24.
He noted that this means many families rely on a single salary to support multiple dependents, stretching resources thin. In a slow-growing economy, businesses are hesitant to hire and often keep wages low. High unemployment also makes it harder for low earners to demand better pay, with countless job seekers competing for very few openings. For ordinary South Africans, this translates into fierce competition for work and salary increases that barely make a difference.
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Government debt is making life harder
Blair highlighted that government debt is making life harder for everyday South Africans. By early 2025, the national debt had risen to about R5.7 trillion, nearly 77% of GDP, and is expected to climb further. Servicing this debt, paying interest, is consuming a growing share of the budget, leaving less for social grants, infrastructure, and job creation.
The government borrows roughly R1.6 billion daily to stay afloat, which pushes up taxes and tariffs, directly affecting households. For low-income earners, this means tighter budgets as rising costs for essentials like electricity and fuel far outpace modest salary increases, creating a cycle of financial pressure that is hard to escape.
Blair concluded by saying that salary increases in South Africa right now are like a temporary fix on a deep wound, helpful, but far from solving the problem. He urged people to know they are not alone, to push for fair wages, support policies addressing debt and job creation, and consider upskilling for better-paying opportunities.
3 More budget-related stories from Briefly News
- Briefly News previously reported that a car salesman shared which cars people who earn R8 000 can buy.
- A young lady shared what R200 can get someone from the grocery store, and South Africans couldn't believe what she bought. People had mixed feelings about it.
- A content creator shared the amount of food she bought with R500 and shared her thoughts on the cost of living in South Africa.
Disclaimer: The views and opinions expressed here are those of the author and do not necessarily reflect the official policy or position of Briefly News.
Proofreading by Kelly Lippke, copy editor at Briefly.co.za.
Source: Briefly News
