South Africans Demand Wage Growth Policies Amid Rising Inflation and Declining Average Salaries

• South Africans are calling for policies that support wage growth in line with inflation as recent statistics show a 0.1% decline in average salaries in early 2024
• Despite a 4.6% year-on-year increase, wages have not kept pace with a 5% inflation rate, leading to a real-term decrease in purchasing power
• Experts emphasize the need for sustainable economic policies to address these challenges and improve living standards

South Africans are calling for policies that support wage growth in tandem with inflation.

According to experts, addressing these challenges will be crucial for ensuring sustainable economic development and improving the living standards of South Africans.

Stats reveal a dip in salaries

The latest Quarterly Employment Statistics (QES) from Statistics South Africa reveals a minor decline in the average formal, non-agricultural salary in the first quarter of 2024.

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The average salary recorded was R26,791, a slight drop of 0.1% from the R26,894 observed in the fourth quarter of 2023.

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Despite this quarterly decline, the year-on-year comparison paints a more positive picture.

The average salary in Q1 2024 was 4.6% higher than the R25,602 recorded in the first quarter of 2023.

However, when adjusted for inflation—which averaged around 5% over the same period—the salary increase does not fully compensate for the rise in living costs, indicating a real-term decrease in purchasing power for many South Africans.

South Africa's workforce and broader economic landscape

Dr. Thandi Ndlovu, an economist, said the slight quarterly decrease in average salaries is a seasonal trend

“Which we observe almost every year, it’s not entirely concerning. What is more concerning is the real-term decline in earnings when adjusted for inflation.

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“This suggests that while nominal wages are increasing, they are not keeping pace with the cost of living, putting financial pressure on households."

Dimakatso Pheladi, an unemployed graduate in Pretoria said this translated to the policies in the country.

“We need newer and fresher policies that tackle and directly deal with our problems and issues, the policies we have now do not align with our problems.”

Paul Seboko, a labor market specialist, said the data underscores the ongoing challenge of balancing wage growth with inflation.

“Employers are likely feeling the pinch from higher operating costs, which limits their ability to increase salaries in line with inflation. For employees, this means tighter budgets and reduced discretionary spending, which can have a knock-on effect on the economy."

More and more decreases

Employee gross earnings fell by R35.1 billion, a 3.5% decrease, from R993 billion in December 2023 to R957.9 billion in March 2024.

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This decline was driven by reductions in several industries, including trade, community services, manufacturing, construction, transport, electricity, and mining.

Conversely, the business services sector saw an increase of R9.3 billion.

On a year-on-year basis, gross earnings rose by R43.5 billion, or 4.8%, from March 2023 to March 2024.

New salary increases for SA minister’s salaries leave SA enraged

Briefly News previously reported that South Africa's next deputy president's salary will increase to R3.16 million annually, with Members of Parliament also receiving over a million rands.

This has sparked public outrage, given perceived poor service delivery and misconduct in Parliament.

Despite salary hikes, several ministers, including Zizi Kodwa and Naledi Pandor, will not return to Parliament.

Source: Briefly News