The concept of who belongs to the middle class in South Africa is not set in stone as it shifts and is based on various factors.
According to Statistics South Africa (StatsSA), the average monthly salary in SA’s formal sector is R26,791 as noted in the body’s Quarterly Labour Force Survey (QLFS)
Research published by The University of Cape Town’s Liberty Institute of Strategic Marketing noted in 2023 that a household or person would need to earn around R22,000 to be seen as middle-class in South Africa.
Eighty20 also noted in its latest Credit Stress Report that households with an income of around R25,000 a month and a personal income of R15,000 can be defined as middle-class workers.
The Bureau for Economic Research (BER) said in its latest report on consumer confidence that South African households earning between R5,000 and R20,000 per month could be considered middle-income households.
Additionally, Discovery Bank added in its SpendTrend 2024 report that middle-income South Africans earn between R100,000 and R350,000 a year, which is around R8,000 to R29,000 per month.
Discovery Bank expanded this range slightly further, highlighting in its SpendTrend 2024 report that mass affluent (middle-income) individuals are those who earn between R100,000 and R350,000 a year.
This works out to between R8,000 to R29,000 per month, which is in line with the South African Reserve Bank’s (SARB) estimated range of the South African middle class.
Unemployment in SA
It is pertinent to also note the fact that unemployment is rising in South Africa and is at an all-time high.
The QLFS for the second quarter (Q2) of 2024 noted that South Africa’s official unemployment rate has increased from 32.9% in the first quarter (Q1) of 2024 to 33.5% in Q2.
While looking at the period from January to March of 2024, StatsSA said that there were 8.2 million unemployed South Africans. This number has risen to 8.3 million in the period from April to June 2024.
The data showed that unemployment in SA is at its highest rate since 2022.
StatsSA noted that 3.6 million South Africans or 35.2% out of 10.3 million young people aged 15 to 24 years were not in employment, education programmes or in training.
The middle class and debt
DebtBusters Quarterly Debt Index for Q2 of 2024 noted that South Africans who earn the average middle-income salary spend 63% of their income on debt repayments.
This research correlated with data from PayProp which showed that South African renters who earn under R40,000 per month are paying more than half their income on debt.
PayProp’s research showed that South African renters in particular are facing a huge debt burden.
The company said that in Q2 of 2024, SA tenants’ expenses have been increasing steadily, faster than their average income.
“Rents as a percentage of income didn’t move much year-on-year, but debt repayments did, going from 43% of income to 46.7% for the average applicant.
“Average disposable income is now just 23% of net income, compared to 27.2% a year earlier,” the report said.
Specifically, the researchers found that for people in income brackets above R40,000, debt spending falls sharply, and disposable income rises to match.
The report did note that paying for the roof over your head is a major priority for middle-income South Africans.
“While the pressure of debt repayments has increased year-on-year, that hasn’t stopped people from paying their rent,” according to the report.
The data found that 18.1% of tenants were in rent arrears in Q2 of 2024 compared to 18.4% a year earlier.
‘Medical aid is something I still can’t afford’
We spoke to two middle-class South Africans based in Cape Town.
Their salaries fall between R20,000 to R30,000 per month after tax.
Roman Daniel, a candidate attorney based in Observatory said that he earns less than most people think he earns but knows that his salary will increase as he progresses in this vocation.
When asked about his spending habits he said that his main liability is his rent and food bills.
Daniel said he does not have money for private health care as yet, but hopes in the future to get that as he sees it as a priority.
“I know medical aid is important and having been on my dad’s medical aid for the majority of my life it was an adjustment to have to pay it myself,” he said.
“Medical aid is something I still afford right now but I will make a it priority in the next year or so when I get an increase or job that helps me pay for it,” he added.
Children
Janine van Dyk is a Sound Engineer based in Kenilworth in Cape Town.
She explained that her salary is between R25,000 to R35,000 per month and her major bills include her bond repayment, medical aid, food and petrol.
She acknowledged that medical aid has become a major necessity for her as she embarks on her parenting journey with her husband.
“My husband and I have decided that we are ready to be parents and I knew that I needed to get medical aid to assist us as we prepare to have a child.
“I have always been super healthy and did not need medical aid but with the idea of a child now on the cards, medical aid was vital.
“Wanting to have a baby meant that we needed medical aid and so it took me a few months to decide the right medical aid option for us,“ van Dyk explained.
“We currently spend around R2,500 monthly on medical aid with Discovery,” she concluded.
