The South African Federation of Trade Unions, which has been concerned and angry at workers’ falling living standards, has now been proved to be fully justified, with the revelation in BankservAfrica's latest Take-home Pay Index that take-home pay levels declined dramatically in May 2018:
“The average gross salary in May 2018 was R14 290 in current terms. Net take-home pay was R10 010. But when the gross salary is changed to constant 2016 money - to make comparison easier - it decreased to R13 621, some R290 less than in April 2018.
“The current typical wage increased by 2.8%, but after taking inflation into account, declined by 1.5%. The decline leaves take-home pay in constant terms at the same level as in December 2013".
economist Mike Schüssler, in a comment about the BankservAfrica report, also confirms what SAFTU has been arguing - that lower wages are not just a burden on the low-paid workers and their families themselves but have a negative affect on the whole economy.
“The shrinking economy and low profit margins,” he says, “made large salary increases unlikely with employees feeling the impact of the burden of the current difficult times…As such May is likely to reflect badly not only for retailers but also for other sectors that rely on consumer spending."
This is the same big pro-capitalist commentator who said in 2014 that the cause of high unemployment is “militant labour organisations making demands for ever increasing wages”, implying that higher wages increase unemployment and inequality. Yet now he is admitting that low wages reduce consumer spending and demand for goods and services and thus confirms SAFTU’s argument that falling incomes actually increase unemployment and inequality and slows down economic growth even further.