Inequality in South Africa

Despite the institution of racially inclusive democracy, inequality in South Africa persists decades after the end of apartheid. According to a 2018 report by The World Bank, South Africa is one of the most economically unequal countries in the world. Inequality has gone up since the end of Apartheid in 1994 and remains high.

The Situation

In 2015, South Africa had a Gini coefficient of 0.63, the highest in the world. Also in 2015, the top 10 percent of earners controlled 70 percent of the wealth in South Africa, while the bottom 60 percent had 7 percent of the wealth. Fifty percent of South Africans earn $5 per day. Despite the official end to apartheid and the holding of multiracial elections, inequality in South Africa continues to operate on racial lines. Black South Africans mostly make up the lower class.

A significant wage gap also exists between segments of the population. There is a very small middle class with workers in either very high paying jobs or very low paying jobs. The high paying jobs earn on average five times the amount of lower-paying jobs. Therefore, a small segment of the population has similar income to those in developed countries, while low-wage laborers have wages comparable to ones in low-income developing countries.

High unemployment and low economic mobility mark inequality in South Africa. Unemployment reached 27 percent in 2017.

Poverty is high for a middle-income country and is a particular problem for black South Africans, the uneducated, the unemployed, female-led households, large families and children. Poverty also has a significant geographic indicator, a relic of the apartheid era. Poverty runs high in regions that people oppressed during apartheid, particularly the homelands, land set aside for black South Africans. Although the likelihood of living in poverty depends, to some extent, on race and gender, research indicates that skills and labor market factors play a significant role, which indicates that public policy has the potential to reduce poverty.

South Africa’s poor public education system means that skilled and professional labor is in short supply. Reforming the education system to make students better prepared to join the workforce could reduce poverty significantly.

Land Rights

Inequality in South Africa continues to connect to land rights even after the end of official segregation. Many black South Africans live in slums, which numbered 300 in 1994 but 2,700 in 2019. These underfunded living quarters stem from the 1960s when the apartheid region uprooted many black residents from their homes and sent them to live in isolated townships. The forced relocations meant many had to spend the bulk of their income on transportation and had to go to underfunded schools which did little to prepare students for the job market, contributing to the cycle of poverty.

Most relocated families have never been able to return home even after the end of apartheid, as prohibitively high costs keep them out of the big cities and in impoverished outskirts. Many have to commute from the outskirts of the town to jobs in the city; the commute can cost $3 a day out of an average wage of $10 a day for a service worker. Sending a child to a school in the city to avoid the poorly performing township schools also incurs costs.

Efforts to Eliminate Poverty in South Africa

Many tracts of public land lay empty, presenting opportunities for building housing. Reclaim the City has been working to stop the privatization of empty government land. It has moved over 1,000 people into abandoned government property such as hospitals, utilizing a law that says people cannot evict citizens if they lack a better alternative. Additionally, groups like the Social Justice Coalition are working to improve informal settlements where people already live by building amenities and securing formal occupation rights.

Additionally, the South African government has taken steps to reduce inequality with the implementation of the National Development Plan 2030 (NDP). The NDP seeks to end poverty within the country by 2030. The policy focuses on “drawing on the energies of its people, growing an inclusive economy, building capabilities, enhancing the capacity of the state, and promoting leadership and partnerships throughout society,” according to the National Planning Commission’s NDP Executive Summary.

– Clarissa Cooney
Photo: Wikimedia Commons

Inequality in South Africa
South Africa has long been known as one of the most unequal societies in the world. In the 1990s, South Africa’s Gini coefficient–a measure that reflects inequality, where zero is absolute equality and one is absolute inequality–was, at 0.66, the highest in all the 57 countries for which this data was available. That measure, as of 2015, has remained the same. The top 10 percent of South Africans earn roughly 60 percent of all income and own 95 percent of all the country’s assets, whereas 80 percent own no wealth at all. Inequality in South Africa continues to be a major issue as the country moves to distance itself from its apartheid- era exclusionary style.

The root causes of South Africa’s severe inequality can be traced back to the establishment of Cape Town, a Dutch shipping port in the 1650s. Over the next two centuries, “military conquest and political exclusion, which took a colonial and racial form,” expanded into the interior.

After the British took over in the early nineteenth century, the defeated indigenous groups were never fully incorporated into the economic and political model. The twentieth century brought the neighboring counties under British rule, culminating in a peace settlement which “inscribed racial discrimination in the foundations of the new South African state.” The framework for inequality in South Africa had already been laid by the time the National Party came to power in 1948 and enforced its apartheid legislation.

South Africa continues a system of socioeconomic exclusion. However, whereas historically the exclusionary practices were racially-based, today the extent and depth of inequality in South Africa is increasingly intersectional. Although it continues to impact black South Africans the most, it strikes at race, gender, class and age. Over 55 percent of South Africans continue to live in poverty and unemployment sits at 25 percent.

All hope is not lost, however. The University of Witwatersrand in Johannesburg has founded a new center, the Southern Centre for Inequality Studies, that will drive a five-year-long, interdisciplinary project. It will include approximately 80 researchers from across the country: economists, historians, legal academics, healthcare experts, sociologist and other disciplines.

The most promising hope yet for combating inequality in South Africa comes from the implementation of the National Development Plan. The plan seeks to reduce inequality and eliminate poverty by 2030 by “drawing on the energies of the country’s people.” Some of the key points include: increasing employment to 24 million, ensuring all children can read and write by the third grade and providing affordable healthcare and a public transit system. It also aims to strengthen the criminal justice system, including governmental accountability. “Progress over the next two decades means doing things differently,” the plan states.

In detail, the plan calls for:

infrastructure investment set at 10 percent of the country’s global domestic product (GDP).
raising rural incomes.
strengthening social wages.
professional public service.
private investment to boost labor.
housing market gaps to be closed.
informal settlements to be upgraded.

After handing over the plan to President Jacob Zuma, Minister Trevor Manuel stated that “social cohesion needs to anchor the strategy.”

South Africa’s apartheid era formally came to an end in April of 1994. Less than a month later, in May of 1994, Nelson Mandela became the first black, democratically elected president. The exclusionary system that Mandela grew up in is still widely overreaching within the country, but as the nine provinces continue to work together, there will be hope. Inequality in South Africa does not have to be a perpetuation.

– Aaron Stein

Photo: Flickr

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