Here’s where half your salary goes

With the alarming findings of the latest Household Affordability Index (HAI) report painting a bleak picture of the financial crunch most working South Africans bear – average workers spend over 57% of their monthly earnings on transport and electricity – labour and organs of civil society yesterday expressed extreme concern.

According to the Pietermaritzburg Economic Justice and Dignity Group’s (PMBEJD) index covering January 2025, workers earning at the level of the national minimum wage (R28.79 per hour), spend 57.7% of their salary on two essential expenses – transport and 350 kilowatts of pre-paid electricity.

“That workers should be spending a large portion of their salary on just those two items, should be considered worrisome, because it costs about R3 830 to support a family of four with food.

57% of salary spent on transport and electricity

“Should the food be included into the salary, that translates to a food cost shortfall of about 46.4%. This excludes other expenses: school fees, rent and other basic essentials.

“It is therefore, necessary that we should look at wage levels in South Africa,” said PMBEJD programme coordinator Mervyn Abrahams.

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Abrahams called for “a major conversation on the affordability crisis” before next week’s tabling of the budget by Finance Minister Enoch Godongwana.

“There are one or two ways of dealing with this affordability crisis – either to increase salaries to a level where workers can live with dignity and purchase essentials they require, or we ensure prices of these essential goods are lowered,” said Abrahams.

Trade Union federation Cosatu said it was “extremely concerned about the painful reminder of how little, workers are paid”.

Reminder of how little workers are paid

“The index findings also serve as a reminder of how much the cost of living has risen and how deep in debt most families are.

“It is a ticking time bomb that must be addressed,” said national spokesperson Matthew Parks.

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Reflecting on interventions Cosatu pursued at National Economic Development and Labour Council (Nedlac) and in parliament, Parks said the federation’s proposals included:

• Easing workers’ debt burden on Eskom “to end its deep double-digit tariff hikes”; and
• Support for Metro Rail to help 10 million commuters with affordable public transport.

“It is critical that government returns to the negotiating table at Nedlac on measures to reduce the fuel tax regime.

“Companies, too, need to reduce the wage gap and pay workers a living wage,” said Parks.

Poor and poorest should be cushioned against cost of living

Nedlac leader of the community constituency, Thulani Tshefuta, said: “The majority of the working poor [wages] is spent on food, electricity and transport – big contributory factors on people daily carrying themselves to work, without any prospect of growth or progress in life.

“The poor and poorest of the poor should be cushioned against the cost of living – deepening poverty in South Africa.

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“We should make basic services and indigent policies to work – providing a baseline of services to the poor, so that the most minimum needs of the people are met.

“We also believe that we need to address the spatial planning in our towns and cities, because those who work always stay far from centres of economic activity.

“We must build residential areas and low-cost houses inside centres of economic activity, where people can walk to work.”

Unacceptable

The General Industries Workers Union of South Africa (Giwusa) called for:

• Adequate free basic electricity for households and affordable tariffs for all;
• Nationalisation of the oil and food monopolies, to provide cheap, clean fuels and food;
• Increased funding for public transport to reduce the burden on workers, with the Passenger Rail Agency of SA rolling out a reliable, efficient and integrated public transport system; and
• Price controls on essential food items to prevent a price squeeze.

“The fact that workers are forced to allocate such a large portion of their income towards transport and electricity, while compromising on food and other essential expenses, is unacceptable,” said Giwusa president Mametlwe Sebei.

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