, , ,

Why Laws Are Not Enough to End Poverty in South Africa

laws aren't enough to end povertySocial justice does not work like a movie. Even if a climactic event results in the removal of unjust systems, the after-effects of injustice persist decades after the fact. Though apartheid was eliminated decades ago, South Africa still sees stark divisions between the living conditions of blacks and whites. These divisions continue due to economic barriers and reveal that laws are not enough to end poverty or prejudice.

The removal of apartheid laws brought several economic opportunities to poor, black South Africans. Unfortunately, this victory did not change ownership of land and capital from its predominantly elite white holders. Without a solid foundation for business creation, few black men and women could find substantial gain pre- or post-apartheid. Even in 2016, ten percent of South Africans own 90 percent of the nation’s wealth, and that ten percent is mostly white.

In an attempt to house black South Africans, the African National Congress built townships around major cities. Though these townships settled close to major centers of business, they were not business centers themselves. With no money flowing into these government-owned lands, the townships became ghettos with dangerous buildings and poor education. South Africa’s unemployment rate neared 28 percent in 2017 and more than half of the black population is officially unemployed.

In a 1997 Regional Review article, Ed Glaeser of the Federal Reserve Bank of Boston examined the creation of ghettos and found features of segregated areas that apply all over the world. Concentrating resources in cities brings great wealth only to those working there. When certain areas of a city are deprived of incoming wealth due to artificial barriers, like in a township, racial tensions increase. An expanding economy in the 2000s doubled the size of South Africa’s black middle class, but the financial crisis of 2008 destroyed that decade’s gains.

Though Glaeser based his studies on American ghettos, his findings easily apply themselves to South African townships. “The ghetto walls themselves, not any increase in racism they may engender, thus seem primarily responsible for the poor black outcomes associated with increased segregation,” he stated. Both black and white South Africans consider themselves victims of racism. 44 percent of whites and 73 percent of blacks believe that the two races will never trust each other.

So what has helped South Africans escape destitution? Though laws are not enough to end poverty, they can create situations that allow people to overcome their struggles. In 2014, South Africa cut the rate of extreme poverty in half. In a press release from 2014, the World Bank credits this victory to redistributed income through tax benefits. Through a progressive tax system and an investment in infrastructure, South Africa achieved higher poverty reductions than Brazil, Mexico, or Argentina that year.

The fight is not yet over. The World Bank concludes its press release with the notion that “reducing poverty and inequality further in a way that is consistent with fiscal sustainability will require a combination of better quality and more efficient public services but most importantly greater employment opportunities.”

The New York Times compared South Africa post-apartheid to Europe post-WWII. Both regions had to rise from adversity by re-engineering their economy and challenging the legacy of colonialism. Just as the Marshall Plan restored Europe to prominence, so might foreign aid bring South Africa to the glory it seeks. Although laws are not enough to end poverty, persistent intervention from other countries could help.

– Nick Edinger

Photo: Flickr

, , , , ,

Shared Interest Helps End Poverty in South Africa

shared_interest
For 21 years, Shared Interest has helped end poverty in South Africa by connecting farmers and handicraft makers with legitimate and supportive investors. In 1994, South Africa had its first democratic elections, and Shared Interest was launched to help bring South Africa out of poverty. The organization was initially started by black South Africans, who had been sent into exile, in the United States in 1985. Shared Interest established a partner organization called the Thembani International Guarantee Fund in South Africa in 1995 to work with banks to invest in low-income black townships and rural communities and help bring them out of poverty.

Shared Interest is the only nonprofit committed to providing guarantees and supplies to black townships and rural communities in South Africa. While South Africa does not suffer from a lack of capital, the country has issues with evenly distributing capital to its residents. Shared Interest works to alleviate this problem by helping banks enhance their financial principal.

The organization was founded by Donna Katzin, who served as executive director from 1986 to 1994. All of the board members have continued to assist South Africa with social justice, education and development.

When people receive the investments, they are able to afford houses, start businesses, support their families and create jobs. This also allows community institutions to expand their operations to better serve more clients, strengthen their finances and increase their commercial viability. Financial institutions and banks benefit as well, as it allows them to build their capacity to serve the underprivileged.

There are more than 400 individuals and institutions in the United States investing in rural communities in South Africa, with investments totaling over 12 million dollars. As of right now, all of the investments have been paid back and the investees have utilized the loaned funds to bring themselves out of poverty. As of 2012, 79,657 people have received assistance from investors, with 100 percent of them being able to pay them back. Because of this support, 43,429 jobs have been created and 36,219 small businesses and microfinance clients have benefitted. In total, 145,473 people have served as guarantee beneficiaries.

Every August, Shared Interest hosts a month-long celebration honoring women in South Africa. The celebration focuses on empowering women who run businesses and are struggling with upholding their economic, social and political rights. The celebration brings together investees to commemorate making it out of poverty and to overcome other issues together.

– Julia Hettiger

Sources: Shared Interest, Matador Network
Photo: BrazilWorks

, , ,

Roughly One-Third of Californian Residents Live in Poverty

California Residents in PovertyCalifornia has always been seen as the place to turn dreams into reality. It seems like Hollywood can take anyone and make them into a movie star. The state’s picturesque valleys, world-famous cities and year-round warm weather draw thousands of new residents every year. While these residents may come to the West Coast full of hope, living there long enough may turn all those dreams and hopes into nightmares.

An article published by the Sacramento Bee reported that about one-third of all Californian residents live at or below the U.S. poverty line. An immediate answer to this staggering statistic is the high cost of living one experiences as a Californian resident. A study by the United Ways of California “identified housing costs as the major factor in poverty, with struggling families spending over half of their incomes for shelter, with rents of two-bedroom housing units ranging from $584 a month in Modoc County to $1,905 in Marin, San Francisco and San Mateo counties.” In the simplest of terms, California isn’t cheap.

The percentage of Californians in poverty is composed of various demographics. For example, a little over 50% of all Latino families and 40% of African-American families reside under the poverty line, compared to 20% of all white families. Poverty levels spike within urban areas, with inner-city Los Angeles accounting for an astonishing 80% of all Californian residents in poverty.

At times, Californians are crippled with unrealistic housing costs. An article by AlJazeera America explored the alarming costs of owning property in California. An excerpt from the article reads, “In some California counties, the ‘real cost of living’ can exceed the federal poverty level by 300 percent. In San Diego County, for example, the household budget for two adults with one infant and one school-age child is $57,759 or 248 percent above the federal poverty line.” People in California spend more than half of their income just trying to pay their rent.

Times are vastly different in California now than they ever have been. Gone is the image of the original “Golden State.” The West Coast now offers a cruel glimpse into global poverty right here in our United States.

– Diego Catala

Sources: Sacbee, Al Jazeera
Photo: The Huffington Post

, , , , ,

40% of African American Children Living in Poverty

African_American
For the first time since the United States began keeping Census records, the number of African American children in poverty has surpassed that of white children. As of 2013, there were reportedly 4.2 million African American children living below the poverty line versus 4.1 million white children. What makes this statistic even more alarming is the fact that white children outnumber African American children under the age of 18 by three to one.

According to an article by USA Today published on July 16 of this year, “The poverty rates for Hispanic, white and Asian children improved as the United States emerged from an economic recession, but for African-American children, little changed. Poverty is defined as living in a household with an annual income below $23,624 for a family of four.” African American children have suffered more than any other demographic in the United States over the past few decades.

Location is largely to blame for the disparity among African American children. Poor black neighborhoods have remained in poverty for decades without any real sign of improvement. The poverty numbers are highly concentrated in these primarily urban, black areas. Detroit has emerged as a hot-spot for African American children.

In the Michigan city, roughly 60 percent of these children are in poverty, significantly higher than anywhere else in the area. An excerpt from CBS reporting on the matter says, “In Detroit, the jobs have left, the good schools have left, there is poor transportation, high insurance rates, and difficulty getting reasonably good paying jobs.” African American children in poverty suffer as a direct result of their environment.

This trend will continue to increase and spread rapidly across the country if real change does not come soon. More African American children are continually falling behind because of a lack of proper education and social reform. The numbers will continue to grow until the government begins to take this situation seriously.

– Diego Catala

Sources: USA Today, CBS Global
Photo: Flickr