By: Pooven Moodley
Inequality is intertwined within existence in South Africa. From the days of royalty to colonization and apartheid, inequality has been systematically entrenched within the minds of people living in South Africa. My experience of inequality started during birth. My father worked for a paper factory which was based in a small town 80 kms north of Durban in KwaZulu Natal. Jobs for ‘non-Whites’ we limited to low paying positions irrespective of the fact that you could have much greater qualifications and experience. This ensured that children of these workers were limited in terms of quality of life, health, education, etc. The town was constructed in a way that the company houses for ‘Non Whites’ were positioned close to the factory, where on some days you could not see your neighbour’s house because of the smoke, even though these houses were attached to each other.
Many children developed respiratory problems. It also meant that we had to use separate buses to get to separate schools and socialize within our own communities. We also walked past the ‘white suburb’ with lush gardens and swimming pools and wondered what life would be like away from of smoked filled houses.
20 years on since the dawn of democracy and life has changed for many. Political freedom brought much hope and some dignity to some people. However, economic freedom has lagged behind on a range of fronts. The service delivery protests is testament to the fact that while many people have better services, communities across the country continue to suffer the indignity of not have access to water and sanitation and have access to poor quality health and education services.
Despite South Africa being an upper middle-income country, millions of people live in dire poverty and destitution, while a small group of elites continue to profit and prosper. South Africa’s problems are not just about inequality, but a triple challenge that also includes poverty and unemployment. According to a recent Oxfam Report http://oxf.am/9GK (Hidden hunger in South Africa: The faces of Hunger and Malnutrition in a Food Secure Nation) in informal settlements 38% of people go hungry daily. People like Elzetta in the Eastern Cape together with her sister and two children live on six rand a day.
In stark contrast to Elzetta’s story, SA has 47,000 dollar millionaires, almost 5,000 more than last year, largely the result of robust equity markets and strong life insurance and pension industries. At the same time, SA falls into the “very high inequality” category, with the wealthiest 10% of the population owning more than two-thirds of the country’s assets, according to the Credit Suisse Research Institute’s fifth annual global wealth report, released on Tuesday. An estimated 63,000 of South Africans are among the top 1% of global wealth holders — 1,000 more than last year. This global elite group includes 35-million dollar millionaires who hold 44% of global household wealth.
Since 1993 income inequality has risen significantly and is currently at its highest – the Gini coefficient increased from 66% in 1993 to almost 70% in 2011. The average income increase was 24.9% for all four categories (i.e. India/ Asian; Blacks; Coloureds; Whites); however, despite the significant growth in income in non-white households, there is still a tremendous gap between the population groups. White-headed households on average earn more than 5.5 times the income of the average black African-headed household. Inequality within racial groups also increased markedly for all racial groups. By 2008 the most populous racial group, the African (Blacks) group, made up 80% of the population and had the highest inequality of the four major racial groups. To date, rising wage inequality is a major factor. Low-skilled workers’ wages have a historic legacy of dampened wages for black workers under Apartheid. On the other hand, the 22.7% increase in the average formal sector wage has been entirely due to increases for top earners.
Between April 1994 and April 2010, the land reform program had redistributed less than 7% of agricultural land albeit with a target of 30% by 2015. The vast majority of agricultural land remains in the hands of fewer than 40 000 white farmers
In order for people in South Africa to live a better and a more meaningful life some fundamentals need to shift. The current economic policy is benefitting a few elite and leaves majority of the people behind. It is essential that women access and own a major share of the productive assets like land. We need to ensure that workers a paid a living wage with quality jobs and a national minimum agreed across all sector. We need to ensure that the investments made in health and education translates into better outcomes based on free universal access to quality health and education. Social security grants should not be an end in themselves, but opportunities need to be created for people to enter into the economy.
The government needs to ensure that companies are paying their fair share, in order for the cash that is leaving the country and the continent illicitly through transfer pricing and other practices and to tax havens is used to reverse the inequality trends in South Africa. Greater accountability is required in the use of public funds to benefit the poor and marginalized communities.
South Africa has the resources, the skills and the very vibrant and active communities to deal with the major structural causes of inequality and poverty. What it needs is the coming together once again of the people to ultimately ensure that there is the end to poverty and reduced inequality within this lifetime.