The latest data from the Old Mutual Savings and Investment Monitor (OMSIM) survey shows that more and more South African households are choosing to do without a domestic worker to save money each month.
The findings are based on interviews with more than 1,500 households, assessing the financial attitudes and behavior of the country’s working population.
OMSIM reveals that about half of the population is feeling high or overwhelming levels of stress in the current economic climate. Notably, middle-income people in the survey – households earning between R25,000 and R40,000 per month – expressed the highest levels of stress.
To combat these levels of stress, households have made significant budget changes over the past two years, placing more emphasis on saving while also turning to the economy and keeping tighter control over their monthly expenses.
Households listed several tactics they employ to manage their spending each month, including becoming more discerning shoppers, switching brands, or seeking out cheaper entertainment packages.
Consumer behavior data from consumer credit reporting agency TransUnion in the second quarter showed that households have been focused on cutting back on discretionary spending over the past three months.
Evolution of the household budget over the last three months
About 30% of households also indicated that they would reduce and move away from domestic help in the home. Historically, Old Mutual’s OMSIM has shown that domestic workers are often one of the first monthly household expenses to be reduced during a financial crisis.
Over the past two years, this sector has come under immense pressure, which has continued through 2022. Statistics South Africa’s Quarterly Labor Force Survey (QLFS) for the first quarter of 2022 showed that the hiring of domestic workers had dropped significantly.
The QLFS shows the number of domestic workers in the country fell from 949,000 in the fourth quarter of 2021 to 808,000 workers in the first quarter of 2022 – a shocking drop of 14.9 percentage points quarter-on-quarter.
While this trend can partly be attributed to seasonal changes, the rise in the cost of living in early 2022 has also likely led to increased cutbacks, as domestic workers are seen as a luxury for most.
Domestic workers were effectively barred from working during the country’s highest lockdown levels in 2020. Additionally, a number of households have laid off domestic workers, citing cost concerns.
Data released by cleaning service SweepSouth in June 2021 showed around 20% of domestic workers lost their jobs due to the pandemic. Although this figure has rebounded considerably with the easing of lockdown restrictions, the latest data points to increased fragility in the sector.
To make matters worse, the domestic worker sector has long been identified as problematic when it comes to compliance with labor laws, with workers still being paid lower wages and subject to abuse and exploitation.
A report by Izwi Domestic Workers Alliance and Solidarity has highlighted human rights abuses against live-in domestic workers in South Africa, outlining how employers and section title complexes routinely impose rules that directly violate the constitutional rights of workers, including the rights to privacy, freedom of movement, family life and adequate housing.
The government has taken steps to formalize the sector, including introducing regulations allowing domestic workers to qualify for benefits under the Workers’ Compensation and Occupational Diseases Act.
The national minimum wage for domestic workers has also been standardized to the national limit, with the rate set to increase in 2023.
Read: This is how many domestic workers there are in South Africa