In 2023, more than half of South Africa’s population lived in poverty. According to the World Bank’s upper middle-income poverty line of $6.85 per day, the rate was 61.6%. Over the last decade, South Africa has faced a period of slow economic growth. This has reduced the number of available jobs, preventing many people from securing a stable income and thus reinforcing the high poverty rate. Unemployment is a major problem in South Africa, but the factors that cause and contribute to it are multifaceted.

South Africa has a long history of structural inequality. In the early 20th century, Apartheid legally systematized racial inequality with laws that limited Black people’s productive ownership of land and specified which schools, houses and jobs were available to people based on their race. Though South Africa ended Apartheid in 1994 and eradicated most discriminatory policies of the era, those policies are still impacting society today. This article will focus on how structural inequality exacerbates poverty and unemployment in South Africa.

Unemployment in South Africa

South Africa has an unemployment rate of 32.9%. There could be two main reasons for this: a lack of jobs to accommodate the nation’s growing labor force and structural inequality of opportunity.

Economic growth and employment opportunities are closely related — typically, greater economic growth results in lower unemployment. South Africa’s slow economic growth is thus a major contributor to high levels of unemployment. As of 2023, its economy grew by only 0.6%, and despite the addition of 790,000 new jobs that same year, the rate of job creation was not sufficient to account for the growing labor force, causing the unemployment rate to rise.

Structural inequality of opportunity also reinforces unemployment — this is particularly noticeable when examining the racial demographics of South Africa’s unemployed. In the first quarter of 2024, people of color had noticeably higher rates of unemployment — for example, Black South Africans had an unemployment rate of 36.9%, compared with 9.2% for their white counterparts.

Racial Inequality and Unemployment

In 2022, the World Bank labeled South Africa one of the most unequal countries in the world, based on its levels of economic and educational inequality of opportunity, among other factors.

Economic inequality is a major problem in South Africa. The nation’s income distribution consists of a large number of low-income earners, a small middle class, and only a few high-income earners, according to the World Bank. Al Jazeera reports that the wealthiest 10% of South Africans accounted for 80% of all wealth in 2022.

The World Bank then cited race as a major driver of inequality in South Africa, given its influence on economic and educational opportunity. According to Amnesty International in 2020, Black households in South Africa earned roughly 20% less than white households, and nearly half of the Black population lived below the poverty line, compared with less than 1% of the white population.

Education

Inequality is also pervasive in schools. Students in the top 200 schools achieve more mathematics distinctions than children in the next 6,600 schools combined. The nation’s child literacy rate is equally worrying: more than three-quarters of children aged nine cannot read for meaning.

These numbers are closely tied to racial inequality. An article in Oxford Academic notes that, while South Africa legally abolished segregation in 1994, most schools are still segregated on racial and socioeconomic lines. According to Amnesty International, “schools serving white communities” tend to be more properly resourced than those designed for (and predominantly attended by) students of color.

De facto segregation in South African schools prevents many children of color from accessing quality education. This, in many cases, serves as an obstacle for their attending university and acquiring skills to help them secure jobs. It also exacerbates the unemployment rate. The majority of South Africa’s population are people of color, many of whom come from disadvantaged backgrounds due to Apartheid-era policies and, as a result, do not have access to key economic and educational opportunities. This makes the demand for certain jobs overwhelming.

Fighting Unemployment in South Africa

Several organizations are working to address South Africa’s high unemployment rate, focusing specifically on communities with disadvantaged socioeconomic backgrounds.

Ikamva Labantu is a nonprofit organization that supports community-led projects to harness the nation’s potential and improve the lives of its citizens. It works in townships across South Africa and holds the firm belief that communities can and should lead themselves — the organization only provides the support and resources they need to accomplish their goals. Ikamva Labantu consists of roughly 100 field workers who work at the individual level, focusing specifically on early child development and the well-being of the elderly. The organization partners with other NGOs, community-based organizations, government departments and donors to further their goals.

Siyabonga Africa also aims to reduce South Africa’s poverty rate, focusing specifically on employing disadvantaged people in need. It offers programs and courses to teach its clients the skills and knowledge they can use to become self-supported. Over the past year, Siyabonga Africa has provided 600 households with food vouchers, offered 700 training courses, established 100 home food-gardens and created 242 new jobs. It supports entrepreneurship at the grassroots level to alleviate poverty and unemployment rates in South Africa, creating more jobs for people in need.

Looking Ahead

Inequality and unemployment in South Africa are multifaceted problems rooted in a complex history. But with organizations like Ikamva Labantu and Siyabonga Africa working at the grassroots level to help disadvantaged South Africans become self-supported, the nation can reduce its high unemployment rate and close its gap of income inequality.

– Lana Swindle

Lana is based in Princeton, NJ, USA and focuses on Global Health and Politics for The Borgen Project.

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