According to PAMS, top income earners are going to be key to our economic recovery from COVID-19 as advertisers ramp up their efforts to stimulate retail and commercial activity. Studies have proved that this group reads more than lower-income groups.
Peter Langschmidt, lead researcher for the PRC, says that the PRC has been under pressure from the media industry to address why the average household income had decreased from the last All Media Product Survey
) in 2015 and the first Establishment Survey
) in 2017.
Following audits of the ES
against three separate household registers in 2017, the PRC uncovered the fact that face-to-face research was significantly under-reading the top end of the market and it embarked on a programme to correct this bias.
"This started the quest to discover why household income was declining; I discovered that there has never been income weighting in the AMPS
samples, and that over the past few years — with time and security concerns — this had led to under-sampling the top end," Langschmidt says.
"Then, for the top R60 000+ per month group, researchers 'guesstimated' an amount of R80 000 a month and used this as an average for this group when multiplying out to get the total average household and personal incomes," adds Langschmidt.
Langschmidt says that he searched 'high and low' for data that would help him to more accurately figure out the top end averages. He reports that he eventually found a SARS table that gave the actual frequency distribution of all taxpayers and the precise census of those earning over R60 000 per month.
Veteran researcher and founder of futurefact Jos Kuper says, "Many have said in the past that it seemed wrong that the so-called topmost supergroup had a fairly low income level.
"It always felt intuitive that it was being under-read either through sampling issues at that income level or else through falsely lower claims. So the use of tax data makes a lot of sense to be able to more realistically estimate income segments," she adds.
According to Langschmidt, the average income of Bill Gates and a room of 300 people would mean they would all be rand billionaires, and this is exactly what happens when one uses actual SARS audited figures of the over 350 000 people earning more than R720 000 per annum (R60 000 per month).
"Once I did this, I found that the average of the R60 000+ per month group was not R80 000; it was R113 000 per month for individuals and conservatively, R130 000 for households," says Langschmidt.
"This not only increases the average household income but also the national average by 7% from R11 900 to R12 700. It increases the top end by over 20%. You can see the SEM
supergroup goes from an average of R36 000 to over R43 000 a month," he says.
Langschmidt adds that these figures are based on actual tax returns and carry high credibility. "It's disconcerting to see such a steep gap between the rich and the poor, but this is the reality," he concludes.
The SARS 2018 tax report reveals that South Africa has:
- 574 859 people earning between R500 001 and R750 000 per annum
- 229 979 earning R750 001 to R1 000 000
- 213 530 taxpayers making between R1 000 001 and R2 000 000
- 45 639 earning from R2 000 001 to R5 000 000, and
- at the very top end, 7 494 earning R5 000 001+.
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