Motlatsi Mkalala
South Africa’s working class is now the fastest-growing segment in the country, as millions of households have moved up from poverty or the working poor. However, breaking into the middle class has become significantly more challenging.
A recent study by the UCT Liberty Institute of Strategic Marketing, commissioned by Liberty and Standard Bank, reveals that 1.2 million households have joined the working class in the past decade. This segment is defined as households earning between R8,000 and R22,000 per month.
| Population growth | 2012 (m) | 2022 (m) | Growth Rate (%) |
| Poor | 27 | 17 | -37,04% |
| Working Poor | 12 | 19 | 58,33% |
| Working Class | 9 | 15 | 66,67% |
| Spending Power | 2012 | 2022 | Growth |
| Poor | 130 billion | 165 billion | +25 billion |
| Working Poor | 140 billion | 335 billion | +195 billion |
| Working Class | 280 million | 550 billion | +270 billion |
These households, representing a quarter of South Africa’s population, largely consist of individuals with some tertiary education. Despite dual incomes for some, their earnings remain below R22,000. Low economic growth, high debt, and limited resources hinder upward mobility.
“Formal education has helped many move towards the middle class, but the working class faces a highly unstable journey. Retrenchments, short-term work contracts, or a breadwinner’s death can quickly push households back into poverty,” says Motlatsi Mkalala, Executive Head of Middle Market at Standard Bank.
Despite a combined annual spending power of R550 billion and 300 new working-class households emerging daily, per capita spending remains low. Many support extended family and spend more on essentials like food as inflation remains high. Commuting is a heavy burden, with many spending an average of two hours daily on travel. For some, this time has doubled, as have their transport costs.
To cope, many turn to debt. As a result, only 34% of working-class consumers surveyed feel financially stable, compared to 69% of middle-class earners.
Equipping the Working Class
“These challenges show the need for accessible tools that provide real-time insights into spending habits and help the working class make informed daily financial decisions,” says Mkalala.
He adds that the research also highlights the need for sustainable credit solutions to protect this segment from exploitative lending. To address this, Standard Bank offers a credit score tool that gives consumers tips to improve creditworthiness so that they can get better interest rates. Other tools in its banking app help customers plan recurring expenses based on their transactional history.
“The working class wants to get out of debt, own homes, and secure better futures for the next generation. However, many are forced to put these aspirations on hold due to unexpected life events,” says Mkalala.
He adds that to help customers reduce debt, build assets, and create sustainable wealth, Standard Bank provides professional advice so that working class clients can realise their aspirations, step by step.
The bank has also developed the award-winning ACHIEVA account proposition to help customers build a foundation for wealth through free services like a Will, R10,000 accidental death cover, and access to money management tools.
“Customers can monitor their credit score on the Standard Bank App monthly. ACHIEVA customer also have access to flexi funeral cover, covering unlimited dependents up to R100,000 per dependent, and flexi life cover, which helps dependents pay off debt, acquire education, or save for the future at an affordable and competitive price,” concludes Mkalala.
Motlatsi Mkalala, Executive Head of Middle Market at Standard Bank. He writes in his personal capacity.
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