Survey shows how pandemic has gutted household incomes
CAPE TOWN - RISING costs are threatening the survival of people who have lost regular work or who have not been able to find work because of the economic devastation wrought by the pandemic, a survey released yesterday by gig technology company M4Jam shows.
After a full year of battling the Covid-19 pandemic, the cost of living for South Africans has become an issue that is as pressing as the country’s need for a vaccination roll-out.
“The survey responses paint a worrying picture of affordability for the millions of South Africans being pushed towards the poverty line by a pandemic that has forced the closure of businesses by the hundreds,” M4Jam chief executive Georgie Midgley said.
The survey showed that people with little to no regular household income were finding it harder to get by this year. Eighty-six percent of survey respondents were among M4Jam’s registered jobbers who contract for temporary and short-term work via the platform and were aged 18 to 34. Twenty percent of respondents earned no regular household income from the formal economy.
Seventy-two percent of those who took the survey were from households with a monthly income up to R25 600, while 36 percent had no personal income, and 77 percent earned up to R12 800, personally.
“Most of the qualitative feedback from our jobbers points to personal financial crises, which reflects an economy that was technically in recession even before Covid-19,” said Midgely.
He said: “The reality is that the availability of work in our economy is insufficient to make a meaningful dent in the unemployment rate. We can only hope for an acceleration in the roll-out of vaccines both locally and abroad, and a swift end to economically devastating restrictions on business.”
When the survey respondents were asked to weigh up salary or earnings increases against rising costs, 26 percent said their earnings had remained static, while 33 percent saw their monthly earnings reduce and 42 percent received an increase.
Thirty percent of respondents were breadwinners, while 70 percent either relied on a partner in their household to contribute toward costs or had no income.
Eighty-one percent of respondents said that before Covid-19 they were able to save some money monthly. Interestingly, of those who managed to save, 86 percent were aged 18 to 34.
Calculating how much the cost of household essentials such as food, utilities and transport had grown since the onset of Covid-19, 32 percent said their monthly costs had increased by up to R800, while 17 percent had seen their monthly costs rise by between R800 and R2 000. Ten percent said their spending on essentials had inflated by more than R2 000 a month.
Eighty-four percent had cut down spending on essential items such as groceries, healthcare and beauty products to get by, while 93 percent had cut back on non-essential items such as fast food and alcohol.
The most common coping strategies included reducing non-food consumption, such as airtime, data and clothing (52 percent), finding a side hustle (46 percent), reducing food consumption (40 percent), and relying on assistance from friends and family to make ends meet (37 percent).
Purchasing items on credit, extending payment terms, taking loans and accepting help from charitable organisations such as churches were other ways South Africans were staying solvent.
Forty-seven percent said they had turned to platforms such as M4Jam in an attempt to find alternative income streams.
Twenty-five percent had managed to keep their jobs, 12 percent had lost their jobs and have been unable to find new ones, 7 percent had lost their jobs and found others, and 9 percent did not intend finding jobs in the formal sector – instead, relying on various side hustles to keep going.
Midgely said one positive aspect of the Covid-19 pandemic was that they had noticed a will to help from all quarters of the economy and the country. Opportunities were being created wherever possible, and charitable organisations had done good work in helping to stave off poverty, he said.