The index for June 2021 recorded a real salary of R12,496, or R14,883 in nominal terms. This is -0.5% lower than a year ago.
The decline in the average take-home pay can be explained by more lower-paid workers getting back into the market, the group said. As weekly or daily-paid workers tend to be paid less than monthly salary earners, the real decline in pay is likely less severe than presented.
“As we have stated in previous BTPIs, monthly wage employees were not as impacted by the Covid-19 pandemic and lockdowns. So, with the lower-paid daily and weekly returning to the system, the average monthly salary will lower a little,” it said.
Although the average real take-home pay did not move much year-on-year, the June 2021 wage was slightly less than the June 2018 average. Similar to the group’s May 2021 BTPI report, this indicates that the wage trend over the last three years has stagnated from the economic impact of last year.
Total salaries paid into bank accounts were up sharply in real terms due to June 2020 being a weak number. However, on a two-year view, the total money paid to all the employees in the National Payment System was still about 3% lower than in 2019, it said.
While the BTPI isn’t a measure of total employment in South Africa, the take-home pay trends do provide insight into overall employment, BankservAfrica said.
In June 2021, the number of people employed by larger formal sector employers appeared to be lower than the 2019 average but far higher than the 2020 numbers.
“Including the 2019 numbers from before the pandemic makes sense, as June 2020 recorded far lower than ‘normal’ take-home payments due to being in the middle of various lockdown
levels,” it said.
The number of individuals employed indicates that recovery was still taking place during June 2021, even though the lockdowns restrictions were imposed in the second half of the month.
“With that said, we are aware that payments are often programmed to take place a few weeks in advance – as we noticed in April 2020, where the numbers barely moved until May 2020, when the first major decline showed. Likely, the recent two restrictive lockdown measures from South Africa’s Covid-19 third wave will only appear in the August 2021 data,” BankservAfrica said.
Despite this, it said that the recovery has been stronger than one could have expected.
“But, the total salary payments are not yet back at levels seen two, three or even four years ago. The decline in total take-home pay paid to all the employees shows the Covid-19 pandemic still influences the number of people employed in the formal sector and the total real amount paid.”
Total take-home pay for all employees in the system increased by 11% year-on-year – but the fact that South Africa has not yet recorded better numbers than 2019, 2018 or 2017 indicates that salaries have not yet fully recovered.
“On balance, South Africa is about 1% of full employment recovery and within 3.5% or so of total money paid for take-home pay of all people in the national banking system,” it said.
“Overall, both average and total salaries are slowly getting closer to what would have happened if the pandemic did not occur. But we expect this to become clearer in the August numbers when the full impact of the third wave reflects.”