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SALARIES made a strong comeback last month, according to BankservAfrica’s Take-home Pay Index (BTPI) released yesterday.
“At the height of the Covid-19 pandemic in 2020, highlighted the impact of the economic situation on South Africa’s salaries. However, the BTPI shows a complete reversal in May 2021, as it continued on its strong recovery, while take-home pay and employment numbers tracked swift and substantial movements,” it said.
Average real take-home pay last month was R12 650, which was slightly lower than April’s figure, but 0.1 percent higher than that in the same period a year ago.
Shergeran Naidoo, BankservAfrica’s head of stakeholder engagement, said: “Interestingly, three years ago, the average take-home pay was R12 706. This is a good indication that salaries have stagnated, mainly as a result of the pandemic and its economic impact.”
The real salary increases are slowing down as lower-paid workers make their way back into the job market. This is evident in the total number of estimated monthly payments in May, which increased by 13.1 percent between 2021 and 2020, following the May 2020 lockdown collapse. However, the number of salaries paid decreased by 11.7 percent in the same period between May 2020 and May 2019.
Mike Schüssler, the chief economist at economists.co.za, said: “Although job retention is in a healthier state, the overall recovery towards job creation is not yet complete. When comparing the number of estimated monthly payments, the number of payments are still below the May 2019 and May 2018 numbers.”
The total aggregate take-home pay in real terms revealed that the total wages paid into employee accounts was 3.7 percent higher than in May last year.
However, the median salary decreased by 1.5 percent from May last year, as the number of weekly paid employees reappeared on the payrolls. Moreover, the tax holiday given to many people last year has had an impact on the median take-home pay more than on the average, the index showed.
“The latest salary numbers will reflect well in the year-on-year retail sales and other consumer spending in May 2021. Meanwhile, the quarterly aggregate salary and pension payments seem to be flattening in the last few months,” said Schüssler.
He said the BankservAfrica numbers in general made it clear that previous record levels had not yet been achieved despite the recovery reaching later stages.
“While the current lockdown level 3 and the Covid-19 third wave may still impair employment and salaries, the majority of the recovery has taken place. But some sectors, such as travel, may take another year or two to recover,” said Schüssler.