CAIPHUS KGOSANA | In SA, middle-class problems are everyone’s problem

An update from FNB on how middle-class consumers are barely keeping their heads above water grabbed my attention. The bank’s retail division estimates it takes an average of five days for such a person to spend up to 80% of their monthly salary. This suggests consumers earning between R180,000 and R500,000 a year survive on 20% of their salaries for more than 20 days a month.

I don’t think any of us are surprised by this, given the financial squeeze. Everything is going up — rising interest rates are pushing up bond and car repayments, the fuel price is at its highest and keeps going up, food prices are shockingly high. Add to that cocktail rising medical aid costs, school fees, water, electricity and municipal taxes, and it’s no wonder families can no longer cope.

But we are not alone. The war in Ukraine, which has triggered unprecedented sanctions on Russia, and supply chain constraints out of China, brought about by a harsh Covid-19 lockdown, are taking their toll in even the world’s most developed economies.  

Sky News breakfast show host Kay Burley visited her hometown of Wigan in England to hear from residents how they are coping with rising energy, food and other costs. Forty-two-year-old Andy Nicholls told her how he’s had to take three jobs, working more than 60 hours a week, just to make ends meet. He was forced to move in with his parents to save enough money for a deposit on a home.

“And I’m not sure what more I could do to try to earn. I mean now, when I know I’ve done 63, 64, 65 hours and then someone offers me another six-hour shift, I just think, physically, can I? And then I think it’s that little bit of extra money that will go towards this and pay for that and get me that,” Nicholls told Burley.

In Sri Lanka, prime minister Mahinda Rajapaksa was forced to resign after weeks of protest against the government’s handling of an economic crisis. The country is facing fuel shortages and food price hikes that are so severe some are forced to skip meals.

While its children may not be dying of hunger, the middle class (I call it the indebted class) still constitutes the bulk of our tax base. When this group cannot keep up with the cost of living, we must all pause and reflect.

Indeed, FNB is correct to conclude the average middle-class South African gets by on 20% of their earnings for 20 days a month. Granted, they are still better off than 35.6% of our unemployed adults who survive on meagre social grants from the state. If you count those who have stopped looking for work, the unemployment rate edges towards 50%.

Two weeks ago the Sunday Times did a spread on how hunger stalks poor households. Almost 200 children had died from lack of proper nutrition. In a food secure country such as ours, we should all be hanging our heads in shame that this is allowed to happen. 

While its youngsters may not be dying of hunger, the middle class (I call it the indebted class) still constitutes the bulk of our tax base. When this group cannot keep up with the cost of living, we must all pause and reflect.

Workers in the UK, with its sophisticated public transport networks, lower levels of crime, decent schooling and a functional national health insurance, are on average better off than their South African counterparts. Andy Scholls, quoted in the Sky News report, holds a permanent job and two part-time gigs to supplement his income. Living in a country where things generally function and the economy is much stronger gives him much less to worry about than a South African contemporary.

Here, having just one job is a huge blessing.

But it becomes a blessing in disguise when one has to factor in the added monthly premium of living in a country where governance fails you every day. Poor public schooling and a weak healthcare system add extra school fees and medical aid costs to the financial burden of many. Poor security at home and in public means having to fork out extra for home and car insurance, and private security.

SA still boasts the largest middle class on the continent, but rising costs of living are pushing many over the cliff. We not only have a crisis of poverty and unemployment, but also one of the employed poor living off credit cards and loans to make it through the month.

It is these diminishing incomes, personal security fears and legitimate concerns about the future of this country that are pushing many skilled professionals of all races to emigrate to countries that offer better prospects.