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Covid-19 impacting informal, lower paying jobs the most – UCT analysis

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Covid-19 impacting informal, lower paying jobs the most – UCT analysis

18th August 2021

By: Schalk Burger
Creamer Media Senior Deputy Editor

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Using data from the National Income Dynamic Study’s Coronavirus rapid mobile surveys (NIDS-CRAM), the University of Cape Town (UCT) Liberty Institute of Strategic Marketing has examined the impact on jobs and income across the economic spectrum.

Perhaps the biggest impact has been felt by those in poorly paid jobs, the study has found.

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By March this year, there were nearly 1.15-million fewer people earning from jobs paying under R3 500 a month. These figures suggest that the informal sector has been particularly badly hit by the pandemic, says UCT Liberty Institute of Strategic Marketing head of projects Dr James Lappeman.

South African households are facing significant financial strain. As the country recently passed its 500th day of Covid-19-related restrictions, many consumers are still struggling to make ends meet.

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“Without going into too much detail, there are limitations with the NIDS-CRAM data we used. In addition, analysts need to be aware that variables like net, gross, individual or household income will influence how comparable data sets are.

“Income from wages, for example, is often only a proportion of total household income. However, the figures do provide a picture of how consumers are faring.

"It is very clear that those South Africans who were in already poorly paid jobs, particularly those working in the informal sector, have been hardest hit,” Lappeman points out.

The data also indicates that middle-class and high-earning South Africans are also coming under relative financial strain.

It seems not only are there fewer South Africans earning higher salaries than pre-lockdown, but the average salary for those earning over R40 000 a month has fallen, the study shows.

“The key point is that the situation is fluid and, therefore, constantly changing. The figures also suggest that, although the economic pain is being felt across the board, it is the most vulnerable South Africans whose welfare is of huge concern,” Lappeman says.

The Institute looks forward to seeing how each segment looks once lockdown restrictions end completely and the delayed census is eventually completed, he says.

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