Mariam Isa
4 July 2008
Johannesburg — INCOME disparities in SA have widened in the past two years, boosted by more rapid growth in high-income brackets, especially among blacks, says the Bureau of Market Research (BMR) at the University of SA (Unisa).
Prof Carel van Aardt at Unisa told Business Day SA's Gini coefficient - an accepted way of measuring income inequality - widened to 0,65 this year from 0,63 in 2006.
That is well above comparable emerging economies such as Brazil, Malaysia and Vietnam, he said. A zero coefficient implies all households have the same amount of wealth, while 1,0 would mean one household has everything.
In 1994, SA's Gini coefficient was estimated at 0,57, mainly because there were fewer wealthy people, Van Aardt said.
"It's what you would expect to happen because not everyone gains equally from sustained economic growth. The people who have gained most in SA are skilled black people," he said.
The research also shows that income inequality is rising more rapidly among black South Africans. The Gini coefficient for this group jumped to 0,69 this year from 0,66 in 2006.
"The level of income inequality within the African population is of great concern," Van Aardt said.
Although some have benefited from employment equity and black economic empowerment policies, those tools were "blunt instruments" for the unskilled , he said. The trend was likely to continue as unskilled people did not have access to institutions to improve their skills.
Another obstacle was that foreign direct investment into SA was too low to generate the kind of growth which would create jobs for low-skilled workers. Lastly, there was very low growth in self-employment, which created huge dependency on job creation, he said.
"A lot of people are waiting for employment and that's not the answer. We need to change mindsets and that is not happening in SA," Van Aardt said.
His research contrasts with estimates from Statistics SA, which put the Gini coefficient at 0,72 in its income and expenditure household survey for SA in the 2005-06 financial year.
Van Aardt said this was because Stats SA overestimated the number of people in the lowest income bracket. In its survey, Stats SA said that if social grants were excluded, SA's Gini coefficient would rise to 0,80.
A BMR survey shows that the biggest number of people in the top income bracket, earning an annual salary of R750000 or more, lived in Gauteng.
This was followed by Western Cape, KwaZulu-Natal, and Mpumulanga.
Gauteng also had the most people in the next income bracket, earning between R500000 and R750000 a year. KwaZulu-Natal came second, followed by Western Cape.
The largest number of low- income earners with annual salaries of less than R50000 lived in KwaZulu-Natal, followed by Gauteng and then Eastern Cape.
Van Aardt's research for 2006, released yesterday, estimates that 33,3-million South Africans earn less than R12200 per year - which is more than 70% of the population.
About 10,5% earned R48701 or more, while just more than 1- million people, or 2,2%, earned more than R194701 a year.
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This tells me that BEE is only working for the "elete".
Can somebody tell me in figures what the "breadline" is.
If Prof. van Aardt of Unisa's figures are correct, namely that approx. 70% of South Africa's population earn R12 200 per annum - that means that each month, after paying basics of rent and transport costs to get to work, 70% of the population are living far below the breadline. Is there any wonder there is crime and xenophobia and suffering? These figures are shocking.