In SA, middle-class problems are everyone’s problem
As our dire economy forces our tax base to emigrate, so our situation goes from bad to worse
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. ..