The latest data has shown that average opportunities real term wage increases for 2017 are as flat as they were in 2016. If you’re hoping that your Rand will go just a little bit further as we move fast through 2017, the latest research shows you should probably think again.
Unless you receive a promotion that’s accompanied by a healthy pay increase or are able to increase the amount of overtime you work, then in real terms, South Africa’s workers can expect to see their spending power remain the same or even fall over the remaining months as during the first half of the year.
Reflecting the South African Economy as a whole, the latest data showed that average real term wage increases for 2017 were expected to be as flat as in 2016. Although wages are expected to increase, the high level of inflation will mean most workers’ wages will not go as far as they did last year.
What do the figures say?
ECA International has recently published its annual Salary Trends Survey, which analyses current and projected salary increases for employees around the world.
According to the group, South Africa will see an average wage increase of between 0 percent and 1,5 percent in real terms this year, which is around the same as in 2016 but down from 2,2 percent in 2015.
Although average salary increases over the next year are relatively high, at around 6,0 to 7,5 percent, the impact of inflation, which is the rise in the price of key goods and services, will negate this wage growth.
Inflation in South Africa is currently sitting at around 6 percent, which means the spending power of the average South African worker will remain the same.
Salary rises around the world
Although the latest news is not particularly positive for South African workers, the information collected from 260 multinational companies across 72 countries around the world found that the predicted real term salary increase of 0 to 1,5 percent is on par with the global average.
According to the research, workers in Argentina will see the largest increase with a 6,5 percent real term growth in wages. That’s despite inflation which is currently running at 20,5 percent.
That means, as a nominal value, wages are set to rise by an astonishing 27 percent. On the other side of the coin is the situation in Egypt, where staff can expect to be 8,2 percent worse off in real terms than they were in 2017.
What can you do to boost your spending power?
With prices increasing at the same rate as wages, then, without working more hours or being promoted, the only thing South Africans can do to boost their spending power is to find ways to reduce their costs.
By spending money more wisely rather than wasting it on unnecessary energy usage, or by spending it on products or services you can live equally well without, it is possible to make your income go further. Without many alternative options, many South Africans may have to make this kind of sacrifice over the next year to make ends meet.