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Galloping costs of living and rising stress

We give you an overview of how household budgets are being tightened by recent price hikes.

“We have seen a 50% increase at our soup kitchen over the last two months with several new faces showing up weekly. We haven’t had this many people looking for food since the start of the lockdown in early 2020,” said Japie Krige, general manager at Tshepo, a community development initiative assisting the homeless in Northcliff.

The Pietermaritzburg Economic Justice and Dignity group (PMBEJD) tracks and and analyses data from 44 supermarkets and butcheries in Johannesburg, Durban, Cape Town, Pietermaritzburg, and Springbok.

General manager at Tshepo, a community development initiative assisting the homeless in Northcliff, Japie Krige and Lesego Modise, an intern, at the recent market day. Photo: Emily Wellman Bain

Programme coordinator Mervyn Abrahams said, “What we are seeing is households are under immense financial stress and it’s not only working and lower income households. The massive pressure exists because essentials goods and services like food, transport, debt payments, electricity, municipal services and so on are all increasing. Wages have remained largely stagnant, or in many cases, workers have had to reduce their wages to remain employed because of the economic fall-out from Covid-19”.

Last month, Minister of Social Development Lindiwe Zulu published draft regulations for the R350 social-relief distress grant, but this offers scant relief when looking at galloping rising costs of living.

This coupled with staggering unemployment levels as released by Statistics South Africa with 63.9% of youth aged 15 to 24 being unemployed with the official unemployment rate sitting at 34.5% of the population.

Mervyn Abrahams, Pietermaritzburg Economic Justice and Dignity groups programme coordinator. Photo: Supplied

Randburg Chamber of Commerce and Industry CEO Linda Blackbeard said, “The fuel price increase, interest rate hike, inflation and other living cost expenses have created a snowball effect since the pandemic. People have not been able to pay increases, buying power is down and so is the rand.”

An overview of rising costs:

  • Nationally the July 2022 report states the average cost of a ‘household food basket’ is R4 748.87. This is up by R60.06 from June, and R611.44 from July 2021.
  • In Johannesburg, the July 2022 basket increased from June to July 2022 by R22.33 resulting in a monthly basket costing R4 771.49.
  • One shocking finding is the price of green bar soap which has increased by 67% from July last year.
  • Property rates increased by 4.85%, electricity by 7.47%, water by 9.75%, refuse collection by 5% and sanitation by almost 10%.
  • The national minimum wage is R23.19 an hour, R185.52 for an 8-hour day or R3 895.92 for 21 working days. With transport and other costs like electricity, PMBEJD calculates that workers’ families will underspend on food by a minimum of 54.5%.

In July 2022, the child support grant of R480 is 23% below the food poverty line and 42% below the average cost to feed a child a basic nutritious diet costing R824.14. “South Africa already faces a crisis of stunting in children because of insufficient nutrition with 30% of boys and 25% of girls under the age of five suffering from the condition. How can the child support grant be so far below the food poverty line?” said Abrahams.

He continued, “Households are making horrendous decisions as to how often they eat and what expenses they can pay each month. It is incumbent on the state to act for the common good when the financial situation is out of the control of citizens, and it should find mechanisms to support them. The relief currently offered is absolutely inadequate.”

 

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