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The gradual reopening of the South African economy and its changes in the labor market, as well as movements in the FIU TERS funds, are causing the slow return of net pay figures, says BankservAfrica.
According to Shergeran Naidoo, Head of Stakeholder Engagements – BankservAfrica, in recent months there have been massive disruptions in the country’s average net salary as various payments were suspended, canceled or adjusted.
“But now we are reaching a point of more normality with the most recent monthly data for August on the BankservAfrica House Payment Index (BTPI) indicating a monthly increase of 1.7%,” he said.
This slight increase is outside the low wage base in August 2019, but also follows recent movements, such as the shift to lockdown level 2 in mid-August 2020, where more companies were allowed to operate.
There were fewer sick leave as restaurants resumed trading, while gyms and fitness centers and domestic travel reopened as interprovincial all-purpose travel resumed.
“While the BTPI is not a reflection of employment, the indication that casual payments increased for the first time in six months suggests that a small number of temporary and day-employment workers are growing again,” said Mike Schüssler, chief economist. of economists. co.za.
“This is different from the number of weekly and monthly payments in August, which decreased year after year. Overall, the number of payments was 6% lower than in August 2019. “
Another factor influencing the August 2020 BTPI was the Covid-19 UIF TERS payments that were being paid to a different system due to the fund’s tax breaks.
“With these payments temporarily suspended in August 2020, the amount of payments made through the normal payment system was probably closer to the usual amount, as many employers went back to paying staff as they normally would have, but with some industries as the exception, ”said Schüssler.
“BankservAfrica’s total net salaries paid into employee accounts through the National Payment System decreased by 1.4% in nominal terms. In real terms, it is estimated to have decreased by 4.7%, which is the smallest drop since April 2020, ”Naidoo said.
Total net pay has naturally improved since June and July.
The average net salary in August was R14,008 in nominal terms Y R11,893 in real terms. However, the real average net salary is unlikely to continue in this positive trend, as the following two months had a relatively high real average salary in 2019.
“A more significant indication of the real wage trend in South Africa today is the actual average net wage for the first eight months of 2019, which was R12,200 per month, indicating that the August 2020 number is almost 2.5% lower than in the same reporting period in 2019, ”said Schüssler.
As many companies pay pension contributions back to pension funds, while other private sector employees have had pay cuts to help companies survive, the wage trend is more likely to remain slightly negative in real terms. This can also be for nominal terms as casual workers return to employment, slightly reducing the average.
“The BankservAfrica Private Pension Index (BPPI) was very positive in August 2020 with a year-on-year increase of 3.7%,” Naidoo said. But, for the third month in a row, the number of private pension payments was closer to 600,000 payments, which is below last year’s norm of around 660,000 payments.
“It appears that those with payments of less than R4,000 per month have been logging out of the system for the past few months for various reasons, such as withdrawing funds, when possible, to make up for salary reductions or losses,” Schüssler said. .
“However, most private retirees are keeping up with inflation, which is good news for the income side of the economy.”
Read: 2.2 million South Africans lost their jobs under the blockade
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