“My husband is very proud, but I don’t give a damn. My husband doesn’t even know about this interview. He doesn’t know that I approached a debt consultant. No one must know we’ve had to use our credit insurance to cover our bond. That is because of a man who doesn’t want the world to know that he’s shitting bricks,” says a Cape Town mother, wanting to be identified only as Shireen.
“I would go steal to feed my family. I won’t jump queues — I will steal. I’m serious: I’ve always said that if it comes to a point where I have to steal for my children, I’m ready to do it. None of us asked for this. But it will be survival of the fittest.”
Although South Africa has launched possibly the largest social-welfare-relief programme in its history to help vulnerable and destitute people during the Covid-19 lockdown, many more families are falling through the cracks.
From working-class to middle-class families, people are feeling the pinch of reduced salaries, cut working hours, and forced unpaid leave.
There is no one strict definition of middle-class in South Africa, with various definitions in the public domain. According to Statistics South Africa, about half of South African families are considered poor, while about 30% are considered working to middle class.
A 2013 paper by the Centre for Development and Enterprise stated that the monthly income of local working to middle-income families ranges between about R3000 and R10000
An African Development Bank report categorises the middle class based not on net income, but daily consumption. This figure ranges between about R24 and R240 a day. Using this assessment, 42% of South Africans would be considered middle-income earners.
Despite the definition, working families have so far experienced, and are in for, a rough economic time.
Shireen says life has been particularly hard during the lockdown. Her husband works in the automotive industry, and she handles the family’s finances. He has been told he can return to work only when lockdown reaches level two.
That may be some time off for the Western Cape. The province currently has the highest number of infections and is the epicentre of the outbreak in the country. Mitchells Plain, where Shireen lives, has been identified as a Covid-19 hotspot.
“We’ve had a 30% decrease in our household income. We are grasping at straws. We’ve paid whatever bills we’ve had with the money available. But we don’t know if it will be enough going forward to next month,” she says.
“If the lockdown continues my husband’s pay will get less and less until nothing is coming in. We’re dreading having to go stand in a line at the UIF [Unemployment Insurance Fund] office.”
Shireen feels that although the social relief effort during the coronavirus lockdown has rightfully been focused on the most vulnerable — poor and underemployed communities — working to middle-class people have been largely left to fend for themselves.
Although the South African Reserve Bank has cut interest rates, and commercial banks have offered some assistance to debtors, Shireen says she had to make use of a debt counsellor to negotiate with her bank to access the credit-insurance facility on her home loan.
This means that for the next three months she will not have to make a mortgage instalment.
“If you go on to social-media platforms, you will see that people are peeved off. They are not getting much readily available help from banks and institutions. And it’s people who are working whose salary is being cut. The unemployed person is at the moment better off than me. Because that person doesn’t have debt that we have. And when this lockdown is done, I’m going to shit myself with all the interest,” she says.
On social media, an online campaign calling for a rent strike during the ongoing lockdown is gaining traction.
The organisers of Rent Strike South Africa receive daily inquiries from renters about what to do if they can’t pay their rent because of financial struggles during the lockdown.
Lockdown regulations currently make it illegal for landlords to evict people.
Several relief organisations that spoke to the Mail & Guardian say they are inundated with queries from working families about food parcels and assistance. Many of these families are too proud to stand in soup lines or ask for grocery vouchers in public.
Head of research and consumer education at National Debt Advisors, Moeshfiekah Botha, says more and more working families are reaching out for some form of credit bailout or asking for advice about how to negotiate with their creditors.
“Even before Covid-19 hit, we’re not a country that is open to talking about our finances. There is still so much guilt and shame associated with a bad financial situation,” Botha says. “Many people will speak about every aspect of their lives, but you won’t hear someone saying, ‘I skipped my bond repayment this month.’ So, as a society we have a long way to go to acknowledge our bad financial situation. So now Covid-19 comes along and throws our entire existence into disarray.”
Botha says people must be proactive and ask their banks and creditors as to what relief is available to them. Unprecedented times of financial insecurity call for extraordinary measures to buffer families from ruin.
“What is the harm in calling your bank and asking them what if they qualify for payment relief? Many have been paying for products like credit insurance, and consumers need to start standing up for themselves and start asserting their financial rights. If your boss says you’re taking a 25% cut in salary, that means it’s mostly people’s net salary that is affected, not their cost-to-company. So that results in the take-home pay being so much less,” Botha says. “Families like Shireen’s are preparing for the worst. Cuts to their budgets have already been made, and all excess expenses kept to a minimum. Yet, the future is still uncertain.
“I have a perfect credit history. I’ve not missed a cent on our bond, or our water and electricity, But that doesn’t mean I have food in my house every month. We have about two weeks worth of food left. Prepaid electricity, even less. I’m shitting myself. I’ve already had to cut so much, from Kellogg’s corn flakes to Jungle Oats … I need to make things stretch as far as I can,” she says.
The department of social development says household income is a determining factor in the distribution of food assistance to ensure that the poorest, most vulnerable and unemployed people are protected from the hardest burden of daily hunger. Social grants have also been temporarily increased for the next six months as announced by President Cyril Ramaphosa last week.
Ramaphosa said in his address to the nation that the government is in discussions with banking institutions to help shield working and middle-income families from the brunt of the economic storm brought on by the coronavirus.