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Keeping Up With Inflation

Recent stats might say that inflation is finally slowing down but that’s only the past few months. Most South Africans have been feeling the inflation crunch for many years in a row.

Every year things get more expensive.  Petrol, electricity, and even basic food items like bread cost more than ever. But while many people are struggling to keep up, government employees earn a lot more than the average South African—making it harder for them to really understand the financial struggles that everyone else is living with.

Those who work in government or for the banks often talk about things like bonuses and annual increases without realising they are living in a bubble that is nothing like the everyday reality of the people who are their clients.

Most people can only dream of such luxuries and are rather faced with a battle to constantly cut back and scrape more out of their salaries each month.

The Average Government Salary

According to BusinessTech, the average government employee earns R41,200 per month, which is R14,400 more than the so called national average.

And that national average, which includes billionaires, is much, much higher than the median salary in SA. For example, the average retail sales associate in South Africa earns closer to R6 838.00 per month.

‘the average government employee earns R41,200 per month’

This gap between government salaries and everyday salaries has been consistent for years, with the National Treasury explaining that government salaries are set high to try to attract the most skilled professionals. At present there are around 1.2 Million people working government jobs in SA.

And we should not forget all the benefits that come with all those government jobs. As additional incentives, government employees often get solid benefits like pensions, bonuses, and medical aid, giving them much more financial security than the average worker.

Meanwhile, Back In Reality

Meanwhile, everyday South Africans are slowly losing buying power.

One of South Africa’s biggest Debt Counselling practices, DebtBusters, reports that over the past few years, inflation has really outpaced wage increases, meaning that over time most people can afford less and less each month.

Due to inflation, most debt straddled consumers currently have 42% less buying power now than in 2016.

Meaning they have had to make cut after cut to cover the basics like food, electricity, communication and transport. And unlike government workers, many private-sector employees don’t have guaranteed annual increases or extra perks to cushion the blow.

As a result, there has been a boom in consumers using credit just to cover food purchases resulting in most households currently having to use 75% of their income to pay their creditors each month.

The Disconnect Makes It Hard To Sympathise

When you’re earning over R40,000 a month, it’s tough to imagine what it’s like to budget on half that amount (or less).

Those who work in Government or even at banks may find it challenging to get into the mindset of the very people they would presumably like to try help with new guidelines or regulations.

Often when discussing matters to do with debt review, there are comments about trying to get consumers to increase their debt repayments each year, as if salary increases and bonuses are common place. Such considerations fly in the face of the realities of those who would enter (or stay) in the process.

For millions of South Africans, every price increases and the loss of buying power continue to be a major challenge, and just making ends meet, while servicing their debts, is a daily struggle.