Rising prices for the average family food basket, electricity and transport compared to the national minimum wage, which does not match the cost of living, will cause the average worker in South Africa to under-eat by at least 46.8%.
This is according to the Pietermaritzburg Household Affordability Index of Economic Equity and Dignity (PMBEJD) for August 2022.
PMBEJD estimated that the average worker earning the minimum wage of 4,081.44 rand for 22 days of work (23.19 rand per hour) would have only about 1,700 rand left over after paying for transport and electricity (which together cost 2,371 .50 rand). With a “minimum food basket for a family of four” costing 3,212.97 rand, PMBEJD estimates that workers’ families will be at least 46.8% short on food.
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“Progress in solving the employment crisis is too slow, and wages for those in work and for people who can access some form of welfare are still too low and destroyed by high costs of transport, electricity and food.” – it is noted in the message.
It said the estimated cost of feeding a child a basic diet in August is 820.26 rand, up 72.96 rand from last year.
“In August 2022 child support of 480 rand was 23% below the poverty line of 624 rand and 41% below the average cost of feeding a child a basic nutritious diet.”
The index, which tracked food prices at 44 supermarkets and 30 butchers in Johannesburg, Durban, Cape Town, Pietermaritzburg and Springbok, found the average household’s grocery basket to be R4 775.59, up 0.6% from in August.
However, the basket became 12.6% more expensive than last year, increasing by 534.47 rubles.
Speaking to Moneyweb, Ashburton Investments economist and portfolio manager Wayne McCurry says the reality is that when buying food, people are forced to go down the value chain, buying from Shoprite or Boxer instead of Pick n Pay. [for example].
“Most of the time, people will not eat less. They will eat cheaper food instead. Perhaps they will eat less meat and prefer to buy private brands instead of expensive branded products from other categories.
“The only real encouragement is that we’ve been through the worst,” McCurry adds.
According to Hayley Parry, money coach and facilitator at 1Life Insurance, the big problem is that there’s a point where you can’t cut your food spending any further. “Against this background, the biggest concern is that people tend to turn to loans, which in turn will only worsen the situation for the consumer at the personal finance level.”
The index also reported food baskets increased in Johannesburg by 2.5%, Springbok by 0.3% and Pietermaritzburg by 2.3%, while Durban and Cape Town fell by 0.9% and 0.5% respectively.
August saw price increases for 21 out of 44 food products, which is significantly lower than in previous months:
- Maize flour prices continued to rise in all districts.
- Flour prices also increased in all areas except Durban.
- The price of oil rose in Johannesburg by another 7.08 rand, bringing a 5 liter bottle to 246.91 rand.
- Prices for white and brown bread rose significantly in Johannesburg by 4% and 8% respectively, and in Pietermaritzburg by 9% and 11% respectively.
Another significant increase was seen in the household household and personal hygiene index, which increased by 23.85 rand for the month, bringing the total average cost to 900.45 rand in August.
Municipalities increased the price of prepaid electricity by an average of 7.47%. “In Pietermaritzburg, 350 kWh prepaid electricity rose by 56 rand from 731.5 to 787.5 rand”.
Taxi fares have risen across the country by between R2 and R3, and in some cases by as much as R5 for a local journey.
“It is worth noting that although monthly price growth appears to be declining, [cost of the] the domestic basket is still expanding, albeit at a slower pace. We do not yet see significant price reductions that would significantly reduce the overall cost of the household food basket and ease the pressure on households,” the report says.
“The high cost of food remains a major crisis for millions of South African families and continues to frustrate people’s need to live fulfilling lives, to be able to afford adequate nutritious food, to be fit and healthy and to control their future. .”
Parry says it’s important for South Africans to manage their money well, avoiding loans and building an emergency fund if possible.
“We don’t know what’s going to happen with the rising cost of living and the underlying factors behind these problems. We are not usually forced to develop money management skills when we are financially secure. But it’s an opportunity to get financial education and learn to focus on what we can control,” she adds.
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