Lower-income brackets experienced the most job losses in January: BankServ Africa

Most of the job losses recorded in January 2023 were in the lowest-income groups. This is according to data from BankServ Africa, which processes the transactions of banks and other financial entities.

At the same time, the average nominal take-home pay has continued on a downward slope over the same period. In January, take-home pay dropped to R14 300, when compared to the previous month.

BankServ says the challenging economic environment continues to affect companies. Many are operating under high-pressure conditions brought on by the ongoing load shedding and rising costs.

Bankserv Africa data shows that employment levels in January 2023 were lower in comparison to the same period last year. Its data shows that 60% of job losses occurred in salary categories for people earning less than R5 000 per month.

BankServ says this is most likely due to a reversal of temporary jobs created during the festive season. According to the group, the number of salaries paid into South Africa’s bank accounts was lower in this period.

“The majority of job losses, with less salaries paid into bank accounts were in the lower income categories. Now I think one could explain or one reasoning for that could be that there was a lot of seasonal employment in the festive season in December which now gets reversed in January,” says Independent Economist, Elize Kruger.

BankServ says the challenging economic environment is making it harder for companies to create jobs and or increase salaries.

“The average take-home pay is under pressure which I think has got a lot to do with the difficult economic environment that companies currently experience in South Africa. Now if you think about the challenges of ongoing load shedding, high cost of production which is being driven by higher fuel prices, higher wage demands in the light of higher interest rates, now the list is quite long,” Kruger adds.

BankServ Africa says companies are currently more focused on spending their money on energy investment. And this is money that was earmarked to expand business operations.