South Africans are cutting back on food, healthcare and data to survive
South Africans with little or no income are finding it increasingly harder to get by, with many cutting back on groceries, healthcare, airtime, data and clothing.
A survey conducted by gig technology company M4Jam among its temporary and short-term workers has found the cost of living for South Africans has become an issue that is as pressing as the country’s need for the Covid-19 vaccination rollout.
It shows that for those who either lost regular work as a result of lockdown restrictions and social distancing or cannot find work because of the economic devastation, rising costs are threatening their survival.
M4Jam said 86% of survey respondents are aged 18 to 34, and 20% earn no regular household income from the formal economy.
The survey showed 72% of respondents were from households with a monthly income up to R25,600, while 36% had no personal income and 77% personally earned up to R12,800 monthly.
“Most of the qualitative feedback from our workers pointed to personal financial crises which reflect an economy which was technically in recession even before Covid-19 made its presence felt,” said M4Jam chief executive Georgie Midgley.
“While we are pleased to be in a position to help some South Africans find work via our tech platform, the reality is that the availability of work in our economy is insufficient to make a meaningful dent in the unemployment rate.
“We can only hope for an acceleration in the rollout of vaccines both locally and abroad, and a swift end to economically devastating restrictions on business.”
Weighing up salary or earnings increases against rising costs, 26% said their earnings had remained static, while 33% saw their monthly earnings reduced and 42% received an increase.
M4Jam said 30% of respondents were breadwinners, while 70% either relied on a partner in their household to contribute towards costs or had no income.
The survey showed 81% of respondents said before Covid-19 they were able to save some money monthly. The results showed that of those who managed to save, 86% were aged 18 to 34.
We can only hope for an acceleration in the rollout of vaccines and a swift end to economically devastating restrictions on businessM4Jam CEO Georgie Midgley
Calculating how much the cost of household essentials like food, utilities and transport had increased since the onset of Covid-19, 32% of respondents said their monthly costs had risen by up to R800, while 17% had watched their monthly costs rise between R800 and R2,000.
A total of 10% said their spending on essentials had increased by more than R2,000 per month, 84% said they had cut down spending on essential items like groceries, healthcare services and beauty products to get by, and 93% had cut back on non-essential items like fast food and alcohol.
The most common coping strategies included reducing non-food consumption such as airtime, data and clothing (52%), finding a side hustle (46%), reducing food consumption (40%) and relying on assistance from friends and family to make ends meet (37%).
Purchasing items on credit, extending payment terms, taking loans and accepting help from charitable organisations like churches were other ways South Africans were staying solvent.
The survey found 47% said they had to find alternative income streams, 25% had managed to keep their jobs, 12% lost their jobs and have been unable to find new ones, 7% lost their jobs and found others, and 9% do not intend finding jobs in the formal sector and would instead rely on side hustles to keep going.
“One positive aspect of the Covid-19 pandemic is that we have seen a will to help from all quarters of the economy and the country. Opportunities are being created wherever possible and charitable organisations have done incredible work in helping to stave off poverty,” said Midgley.