Will you be richer in Johannesburg?

Money-Swim-uncle-scrooge-mcduck-35997716-350-259Most people feel like they could do with a bigger paycheck. Seeing as how Johannesburg is touted as the City of Gold, one can understand why so many South Africans consider moving there to deal with this one niggling desire.

Johannesburg and Cape Town are often compared with each other in terms of money-making potential. You live in Johannesburg to make money and achieve career success, while you live in Cape Town supposedly for the quality of life.

If you had to move to Johannesburg today, would you really be richer though? There are two things you have to look at: earning potential and cost of living.

Earning potential

The statistics show that the assumption is right, in general there is indeed more money to be made with jobs in Johannesburg. Johannesburg salary packages are generally between 15 – 25% higher than Cape Town equivalents, particularly within the advertising, marketing and public relations fields.

It’s difficult to pinpoint the city’s wealth to just one reason. It can be said though that there is a long trend of an influx of skills in Johannesburg, ever since the abundance of gold in the 1800s. The influx of skills and talent hasn’t stopped, but has only gained momentum. Johannesburg is well regarded as the industrial and business capital of South Africa, attracting both local and international investors.

Further, Johannesburg is regarded for its “ease of doing business” and “financial flow”, as evidenced in a MasterCard Worldwide study. The study also showed that the city is Africa’s economic leader, offering a strong business climate that supports commercial development.

Cost of living

It’s also necessary to compare the cost of living. It doesn’t help if you earn more, but spend as much in proportion. It could be argued that that is indeed the case in Johannesburg. Here is a simple comparison with Cape Town for illustration.

  • Consumer prices in Johannesburg are 11.82% higher than in Cape Town.
    • Restaurant prices in Johannesburg are 13.98% higher than in Cape Town.
    • Groceries prices in Johannesburg are 6.37% higher than in Cape Town.

(On the flip side, renting and buying property is 15% more expensive in Cape Town, proving that you really do pay for the view.)

Perhaps more important than the cost-of-living statistics, however, is the kind of lifestyle a city encourages. The lifestyle in Johannesburg can be expensive.

If you spend your time in shopping malls and dining out, then no matter where you live you are going to spend a lot of money. This is especially so in Johannesburg where consumption is more expensive in general.

However, if you live a less expensive lifestyle, you will likely find that living in Johannesburg really will boost your bank balance.

 

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