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Social inequality, like investment, must be addressed

Those at the bottom of society reflect a country’s health – and right now, South Africa is gravely ill.

Andrew Jackson, seventh president of the US, once said: “We should measure the health of our society not at its apex, but at its base”. 

I looked out for comments on the labour market in President Cyril Ramaphosa’s second state of the nation address (Sona), and what I found most interesting is that the relationship between the labour market, inequality and poverty was not emphasised. Instead, the three were mentioned separately and in passing towards ‘bigger’ issues. That said, these issues – mostly investment-dominated – were positive.

This makes me wonder whether the theme of the ANC’s Thuma Mina ‘reconnecting with the people’ campaign is to position investment over social challenges. I hope we’ve learnt that success in the former does not miraculously translate into resolving the latter.

I often think about the various social problems that exist in SA. In the long term, it usually comes down to the intertwined nature of education and income inequality. Until any significant progress is made there, our society is only going to continue on a slow, downward slide.

South Africa’s inequality is an anomaly when compared to countries of similar GDP and development progression. Yet the dynamics of inequality are such that they are interwoven with old longstanding and new emerging challenges. How is that manifestation of inequality affected by the past and present? I’ll use education to develop this thought further.

The education-earnings paradox

On the old and longstanding challenge, consider how the present education policies are failing to undo the deep-rooted legacy of a discriminating and inferior education system the apartheid government conferred upon black people. The South African proletarian working class is not only an inheritor of the present-day failing education; income levels restrict their ability to access better education.

Now consider the new and emerging challenge of (i) skills mismatch and shortage and (ii) the unemployment crisis faced by many graduates. Assume that one way to solve inequality is through education but its policies are characterised by flaws such as producing individuals with high skills and those with low/no skills. The effect thereof is the widening gap between the incomes of individuals. 

Perhaps one of the most uncomfortable features of inequality in South Africa is how it can be linked historically. The dispossession of land and the ensuing creation of migrant labour decided the income and wealth distribution of the country. In many ways, this set the trend for wage determination with those in the rural areas working mostly in the low paying agricultural sector. For those in urban areas, the better part of their income went on transport due to historic spatial planning that ensured they lived far from work.

Migrating from rural poverty to urban poverty

This still endures; rural depopulation is increasing in South Africa, with most working-age people migrating to urban areas in search of employment, higher incomes and better education. In truth, rural-urban migration rarely results in jobs or high income. While their lives may be better due to access to healthcare and basic services, many of them still live in poverty with little to no income.

Whether one sees the effects of spatial planning as a past or continuing factor is not the point, what remains is how access to services determines the employment rate and thus income inequality. We know from Stats SA that income in urban areas is far higher than in rural areas.

It is theoretically possible to overhaul this repeatedly overlooked link between inequality and the labour market in South Africa.

First, government’s policy interventions must go beyond social grant distribution. It needs to lower the skills discrepancy while simultaneously fixing education and not just tinkering with its outcomes.

Second, unless there are social policies that can mitigate poverty, youth unemployment and the heavily indebted middle class, the labour market will continue to punish the poor and the youth with ever-widening income disparities while demanding years of experience from the job market entrant – forever trapping them on the treadmill of hardship.

Inertia

The third should be common sense understanding. However, I’ll spell it out for those who think it is a non-factor in an ongoing inequality crisis. The inefficiencies in government (especially within state-owned enterprises) affect and lessen South Africa’s economic competitiveness. Combined with corruption, cronyism and poor policies, these inefficiencies drag the economy down and dim our opportunities in the global value chain. 

The economic and social fallout of ongoing inequality makes it a triple-threat challenge because, aside from the injustice of inequality itself, (i) its widening has significant consequences for political and economic stability and (ii) it lowers potential growth, further dooming low-income households and the poor to worsening wages and few jobs. A failing economy cannot reduce poverty for its low-income earners let alone those who are dependant on social welfare since the labour market distribution pattern is already tilted in favour of those who are highly skilled and high earners.

The worries about lack of investment are justified, but so too are the ones about the labour market. May we not prioritise one over the other. Resolving the interlocked problem of education and income inequality is requisite for investment. 

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Only some remarks.
Inequality – no doubt a major concern in SA, however the measurement according to the Ginni, give an untrue picture. According to my knowledge, is social welfare pensions not taken into consideration with the measurement. Also comparison between different countries Ginni is not reliable at all, because of the difference in the years when it was measured.
Poorness is a function if employment. The creation of job opportunities, will lead to much less inequality. Trade unions can better the workers life. It however happens seldom in SA. It may be because trade unions is involved in political activities and not the workers activities. An example that is applicable now is the Escom fiasco. A few years ago some of the engineers involved in creating capacity at some of Escom’s facilities was paid off, because of pressure by trade unions. Look where we sit now.

Your comment really summed it up in the last sentence

But the ANC don’t really care, as long as they are crapping on the country, they are content

SABC likes to announce South Africa as a African World Class City

This announcement is an oxymoron and morons are the ANC

I would like to take this opportunity to introduce to the world my latest invention:

The TYPING TRASH THERMOMETER

Sadly, when I tested it for the first time, on the leading article above – it exploded!

Indeed – the tripe spewed above, is among the most emphatic fake news trash, since the ANC claimed it can govern a country. In fact, what passes as an “article”, is garbage of such a magnitude – I do not even know here to start; so just a few bits and scarps (to follow).

CR & govt need to study the Switzerland or Monaco model for societal living. The “poorest” in those countries (or principalities) are wealthy by SA standards.

They also have no mineral natural resources (except for water).

SA needs to copy and paste this model. It’s working.

(We have a very prescriptive business environment….no real freedom; reduce the red tape; rule of law is a joke…most SAPS cases unresolved; i.e. the very basics needs to be set right. How difficult can that be?)

I’m gonna go out on a limb here and say that SA will never in a million years be anything like Switzerland.

I really, really wish it was possible. I mean, who wouldn’t want to live in Switzerland. I just don’t think we have it in us.

I’ve come to terms with the fact that in my lifetime SA is going to get a lot worse before it ever gets better. And even then, that depends on when the ANC gets voted out of power. Only then will we know if democracy will take root here.

Twenty five years after the dawn of democracy and we’re struggling to keep the lights on. Come now, guys. What kind.

Michael, the ANC intellect is way below waht you ask for. SA is dead

This will remain the case as long as we keep pointing the finger, blaming the past and not taking responsibility for our poor choices at the voting booth….

The article is written with the premise that the Govt/ANC actually cares about inequality and will craft policies to address it. They do not, so don’t waste you time writing about it. Look at the quality of the government ministers – on par with the village idiot, except a lot more cunning at lining their own pockets. I have a better chance of solving Fermat’s Theorem than they do of drafting policy which encourages economic growth and job creation. The unemployment rate and low economic growth does not lie.

Freedom before education products proudly brought to you by the ANC. The more village idiots the better for the grim reapers raping SA

Anyone who uses the phrase “proletarian working class” should be obliged to live in North Korea for a few years … you’ll see exactly how much love the proletarian working class actually gets. To save yourself the trouble, feel free to Google ‘Ukraine Famine 1936’

South Africa’s, or rather the ANC’s, approach to inequality is destroy the public education system, destroy the public heathcare system, allow taxi thugs to operate with impunity, destroy Eskom, destroy relations, foster an environment favouring criminality and corruption, making policing non-existent, chase away skilled professional and entrepreneurs, tax the average pay payer into oblivion i.e, restore equality by destroying everything. But kick up a fuss when the racial profile of the rugby team it out of kilter with demographics because that’s what inequality is all about.

The long-term effect of Govt’s policies is anti-growth / anti-jobs / anti-poor (but the intention is different).

(Fair enough in Govt’s defense, many will point out that Govt has created a broad black middle class, that wouldn’t be there during Apartheid rule. Few informal areas had electricity, etc). BUT…this has been achieved through unsustainable social-engineering models / reverse Apartheid as some would call it. It will also not last, as society (represented by Govt) will run out of the wealthier people’s money.

Still some way to go….plenty of Pension Fund/Asset Management funds that can ‘help’ the state through “prescribed assets”….to which the heading of this article leans toward / or soft-soap the notion. Once that is used up, they’ll try to print more currency like Zim or Venezuela. Seen it before.

As an individual one accepts, SA can never have Apartheid back (nor it’s mentalities/principles), but it is to be accepted that under African rule (which uphold to different custom) the western “feel and look” of SA will have to decay/deplete over time. The western-lifestyle like running water & electricity will become more sporadic. So is food & choice of products on shelves, will reduce.
Call it an implosion / sinking ship or whatever analogy, it’s (dryly) a mere returning of SA to the “mean average” of rest of continent. For those too young to realise, SA developed way too fast in the colonial & Apartheid era compared to rest of Africa, with the people responsible for that development not in control anymore, so it’s obvious SA will lose working infrastructure over time, or more PC-correct, to “mimic African life”. Please, do not judge Africa and its people through western glasses….it’s just different. (Am I happy with that? No. So I need to leave eventually). Just a dry and a-political non-emotional observation how civilizations rise and fall.

The existence of squatter camps is not due to too little housing, or too little money – it’s due to too many people. Not too difficult to understand, surely?

SA needs to address its rampant population explosion and desist from “rewarding” people for irresponsible breeding.

Social services should turn their efforts to supporting smaller and properly planned families otherwise in 25 years there will be 100 million “disadvantaged” way beyond the help of any socialist government largess which at present exoects funding from capitalism and private enterprise.

You cannot begin to scratch the surface of dealing with inequality without dealing with the following first:
– Corruption and good governance;
– State inefficiency;
– Porous borders and illegal immigrants;
– Lack of economic growth;
– Policy certainty;
– Early childhood development (not the EFF type);
– Better education;
– Labour certainty.

With South Africa heading down the same route as neighbour Zimbabwe, Southern Africa is on track to be one of the most equal places on earth: Everyone poor and destitute.

Thanks Mamokgethi, very good article. You raise good points which remain relevant today.

All in all South Africa has made serious mistakes in the past and seems to be hellbent on continuing the old mistakes and inventing new ones. As you mention, the intertwined nature of education (or lack thereof) and income inequality has a strong link to the various social problems that South Africa experiences. Then there are the other issues of state looting, the development of a generally corrupt and inept government machine (including SOE’s), all which support and increase poverty and inequality. We sat with a parliament that knowingly kept a corrupt president in power, and this has devastated many sectors of service delivery which the people pay for through their taxes, but which sadly have been abused and pilfered. Yet the pilferers remain at large and roam free. This is not an environment in which social inequality can be addressed easily. The economy is not free, it is filled with racially based rules and regulations, and there are racially based rules within the education system, especially at post-matric level. The question is, why are the sufferers of the current “system of disaster” supporting this system when they vote? Are they unaware of why there are load shedding, high taxes, crime everywhere, filth and rubbish everywhere, rape, murder and mayhem? If you consider that most of the really important government sectors are in a dismal state, electrical power service, postal service, medical service, municipal services etc., surely by now the citizens of South Africa must realize that they are continuously electing the wrong people to lead the country? Or are we an inherently bad, degenerate, society designing our own demise? This I cannot believe.

Yet we constantly believe the idiotic stories of “freedom fighters” who are rubbing their hands and lining their pockets. We believe “there is no problem in Zimbabwe”. These “leaders” are taking away everyone’s freedom and opportunities. Mad leaders are successful, their countries and people are not. There are so many good, rational, hard working people in this country that I find it hard to believe that we cannot find good leaders among ourselves. So many things can be done to change the lives of the poor. What can we change? Many things, too numerous to list here, one of the first things I would change is to make municipalities totally non-political. A municipality must be like a business, and it must be run like a business, and its business is to deliver services and infrastructure that its citizens pay for. A municipality is not a political party brotherhood of disaster, it is not a charity, it is not a delusional draconic policing body (examples abound), and it can responsibly cross-subsidize.

Some of today’s problems we can link to the past, many we can link to the present. Let us not create more problems and rather work together as a nation to solve the existing problems, let us identify the trouble creators and “leaders” who want to lead this country into disaster and get rid of them. They create social inequality, poverty and racial polarization, we need not look further.

Dream on. This is Africa. Corruption,looting, violence and poverty is the norm.

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