Salaries paid in June falls by 20%
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CAPE TOWN - The number of monthly salaries paid in June fell by -20.7 percent over a year, revealing how Covid-19 has affected a fifth of employees salaries, according to the BankservAfrica Take-Home Pay Index released yesterday.
“The figure in June is reflective of the heavy toll the Covid-19 crisis has placed on employers and employees who are faced with major financial distress,” said BankserAfrica head of stakeholder engagements Shergeran Naidoo.
Most of the payments in the index feature large corporates and a fair number of medium-sized firms that are served by payroll service providers and firm-owned payroll administrators. The reduced salary numbers were mostly likely to be in the private sector.
“We surmise that a fifth of employees in the private sector did not receive a salary in June 2020. The -20.7 percent decline could be the result of job losses or it could due to a temporary pause in payments,” said economists.co.za chief economist Mike Schüssler.
He said the salary data provided a quick and effective indication of the employment statistics on the ground through the number of salaries paid, and the latest data was very concerning.
The average take home pay decreased 0.5 percent after inflation, in June.
Daily or casual salary payment numbers fell -35.2 percent in June, the number of weekly salary payments was down -17.1 percent, while monthly payments fell -9.1 percent.
The seasonally adjusted nominal take-home salary in June was R15 869, which was 1.7 percent higher than in June 2019.
The Pietermaritzburg Justice and Dignity non-government organisation said the time was right for the introduction of a Basic Income Grant (BIG), as previous promises by the government to tackle unemployment had come to naught.
“”It can work now...if the pitfalls of South Africa’s peculiar miserliness and short-sighted welfarist framing can be dispensed with. We support the introduction of the BIG, but not primarily as a poverty-alleviation mechanism, though that should be an outcome, instead as an economic investment to reorganise the economy to the advantage of every South African,” the organisation said in a statement yesterday (wed).
It said 9.72 million black South Africans were unemployed in the first three months of 2020, and millions more were likely to have been made unemployed through the Covid-19 crisis.
Schüssler said the total value of take-home salaries paid in June declined by -25.6 percent, while overall pensions pay dropped by -4.6 percent, both in nominal terms. The combined decline for total take-home pay and pensions was “by far the biggest on record” at -23.5 percent.
“The numbers are extremely concerning and will have a profound impact on the economy. The knock-on impact is also likely to be larger than many have estimated,” he said.