There were already signs in the first quarter of the year that companies were reducing overtime amid the weak economy.
The average salary earned by South Africans in the formal sector was slightly lower in February (-0.2%) than in November 2019. However, it was 5.4% higher than in February 2019, which means that the average salary with a solid 0.8 of a percentage point more than the inflation rate – which was 4.6% in February.
If you now earn more than R22 387 a month, you have an above-average salary. This includes overtime and bonuses.
According to Statistics South Africa (SSA), almost 10.2 million people now work in the formal sector, statistically unchanged in the first quarter of the year, as well as compared to last year. The formal sector excludes people working in agriculture, the informal sector and private households.
Employees’ total gross earnings – which include pension fund contributions and other employee benefits – increased by 4.3% year-on-year to R730.3 billion, slightly less than the inflation rate. However, it is 6% lower than in the previous quarter.
Salaries have declined in most industries, especially community services (largely the civil service), manufacturing, trade, business services, transportation, construction and power.
The decline in the gross salary bill of the formal sector while employment remained unchanged may also indicate that senior or highly paid jobs were cut, while more lower paid employees were hired. However, SSA does not set out the reasons for the lower salaries.