How much do you have to earn to be ‘middle class’ in South Africa

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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, which determines what it takes to be considered middle class in the country.

In 2012, the black middle class in the country saw significant growth, with the UCT researchers reporting that they are surpassing the white middle class for the first time. The latest report reflects on the significant and ongoing increase.

The researchers noted that South Africa has high levels of inequality, “so it’s hard to imagine what barriers define the black middle class” — however, the research suggests that this group makes up about 3.4 million people, accounting for 7% of South Africa. Africa’s black African population – with a purchasing power of R400 billion per year.

The researchers said this group is divided between lower middle class, middle class and upper middle class. The lower and upper middle classes are distinguished by the lack of necessary government support.

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

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

The main motivation behind the study was to assess the contradiction in various reports of the middle class in South Africa, which is both struggling and thriving in different contexts. The black middle class in particular does not get any nuance within this story, according to the researchers.

The group found that there has been a “maturation” of the black middle class over the past 15 years — with a new collective focus on creating 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 better long-term financial prospects.

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“We are now seeing more and more second-generation black middle class families emerging, more children being born in the middle class. So the parenting experience is also different. There are also changes in identity,” the researchers said.

“The term used ten years ago to characterize the purchasing power and habits of this then-rising class was ‘catch-up’ – built on an idea that black South Africans in post-apartheid South Africa still had to buy the car or the house because they did not have the privilege of inheriting property like their white counterparts.

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

Travel wasn’t a strong part of the story 10 to 15 years ago either, but the researchers said it was increasingly noticed as a feature where this segment used their purchasing power.

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

“The correlation between economic results and education is very strong (in terms of breaking into the black middle class). Obtaining a tertiary qualification significantly improves results. There will always be unemployed academics, but as a percentage of the unemployed that is relatively small.”

Looking ahead, the study’s researchers said they see the continued growth of the black middle class, where they are not only growing in confidence, but much more owning their own story.

“In the next 20 years, we will see the first major wave of black middle class retirement. What this will look like is open to interpretation, as research into middle-class black retirement is still limited.”


Read: The Cost Of Middle Class Is In South Africa

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