How much do you have to earn to be “middle class” in South Africa

The Liberty Institute of Strategic Marketing at the University of Cape Town has published its latest research on the black middle class in South Africa, defining what it takes to be considered middle class in the country.

In 2012, the black middle class in the country saw significant growth, with UCT researchers indicating they had overtaken the white middle class for the first time. The latest report reflects on its significant and ongoing growth.

The researchers noted that South Africa has high levels of inequality, “so it is difficult to contemplate what barriers define the black middle class” – however, research suggests that this group makes up about 3.4 million people, making up 7% of the population. black African South African population – with a spending power of R400 billion annually.

The researchers said this group is split between lower middle class, middle class and upper middle class. The lower middle class differs in the lack of required government support.

The group defines the middle class in South Africa as households with an income of R22,000 per month and above.

Despite low economic growth, the number of high-income taxpayers in the black middle class has grown from 1.02 million in 2017 to 1.28 million in 2019, the researchers said.

The key factor behind the research was assessing the contradiction in various reports about the middle class in South Africa struggling and thriving in different contexts. The black middle class, in particular, has no nuances within this narrative, the researchers said.

The group found that there has been a “maturation” of the black middle class over the past 15 years, with a new concerted focus on generating generational wealth.

There is now access to better education and the benefit of a long time spent in the middle class, which has strengthened financial decision making and created a stronger long-term financial perspective.

“Now we are seeing more and more second generation black middle class families, more children are being born emerging middle class. Hence, the parenting experience is also different. There are also changes in identity, “the researchers said.

“The term used 10 years ago to characterize the spending power and habits of this then emerging class was ‘asset recovery’, based on the idea that black South Africans, once financially endowed in post-apartheid South Africa, they still needed to purchase the car or house as they did not have the privilege of inheriting assets like their white counterparts did.

“That narrative has now shifted to wanting to create generational wealth, which was not seen 10 to 15 years ago,” they said.

Travel wasn’t a big part of the narrative 10 to 15 years ago either, but the researchers said this was increasingly being noticed as a feature where this segment was using their spending power.

Education, especially tertiary education, has also been seen as a catalyst for better economic outcomes in the black middle class.

“The correlation between economic performance and education is very strong (in terms of breaking into the black middle class). Completing a tertiary qualification significantly improves results. There will always be unemployed graduates, but in proportion to the unemployed they are relatively small ”.

Looking ahead, the study researchers said they see the continued growth of the black middle class, with them not only growing in confidence, but also owning much more of their own narrative.

“Over the next 20 years, we will see the first great wave of black middle class retire. What this will look like is still open to interpretation as research on black middle-class retirement is still limited. “


Read: The cost of the middle class in South Africa