Poverty And Inequality In South Africa PdfBy Arcadia B. In and pdf 23.01.2021 at 07:03 7 min read
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Poverty is defined by the World Bank Haughton and Khandker, , p. It can be defined narrowly or more broadly, depending on how well-being is understood. Narrow definitions of well-being are typically linked to commodities, i.
- Defining poverty, extreme poverty and inequality
- Inequality in South Africa
- Poverty, Inequality and Deprivation in South Africa: An Analysis of the 1993 SALDRU Survey
Jump to navigation. In this article, Keeton discusses inequality, its possible causes and factors that contribute to increasing inequality worldwide. South Africa is one of the most unequal countries in the world.
This paper uses a recent household survey and the CEQ framework to revisit and extend previous research on the impact of fiscal policy on income redistribution, and poverty in South Africa. We find, in accordance with previous research, that direct taxes and cash transfers are overall progressive and reduce inequality and poverty. Our disaggregated analyses, however, reveal that medical and interest tax benefits are regressive. We also find that certain social transfers provided to some minority population groups are not particularly well targeted.
G20 Germany. The consequences of growing global inequalities and uneven development are starting be noticeable because of their effect on social cohesion.
South Africa is such a country that bears the consequences of having the most unequal society in the world. This policy brief therefore uses the case study of South Africa to show how social and economic inequalities can end up undermining social cohesion, the very glue that is holding our national societies together and fostering a greater response to inequalities. The authors propose various measures in which the South African government can address the decreasing levels of social cohesion because of increasing socio-economic inequalities.
This can be done through government committing to adopt redistributive policies in the social and economic spaces. The redistributive policies have to be aimed at redistributing the land, investing in African businesses and increasing the minimum wage.
Inequalities are drastically becoming one of the foremost challenges that the world is facing due to the disparities between the rich and the poor especially in developing countries. While the world is facing growing social and economic inequalities between societies, there are fundamental upheavals that are starting to undermine social cohesion.
Recent studies have shown that inequalities are accompanied by a reduction in social cohesion, specifically in interpersonal trust between different groups which is as a result of economic equality and equality of opportunities Rothstein and Uslaner, South Africa is a prime example of such a country that is mired in inequalities that are starting to impact on its social cohesion.
The country has an income Gini that ranges between 0. This is testament to the failure to redistribute socio-economic benefits more than 20 years after the advent of democracy. The transition from apartheid South Africa to a democratic dispensation in was hailed as a miracle transition that received international praise Mashele and Qobo, It set South Africa on a new footnote with the blanket of a rainbow nation under the late iconic Nelson Mandela.
In , the country celebrated two decades of democracy but the celebration was not entirely met with jubilation, but rather curiosity from the side of the masses who are mired in poverty. The accrued disparities have resulted in the undermining or setback of the reconciliation project that South Africa embarked on after because privileges are still drawn along racial lines.
This means that promises that were made of a better life for all and equal opportunities have not materialised for many Africans. In contrast, it has left many people mired in poverty with the majority of people having gone poorer and the richer getting richer Statistics South Africa, ; ILO, High unemployment rate in South Africa has also resulted in discouraging many people from seeking employment because of prolonged labour market slump, with the youth being heavily affected.
Thus, a high unemployment rate subsequently leads to high levels of poverty and inequality. As proportion of household has reduced, the circumstances of the poor are not getting better. Unemployment and education years of schooling identified as the main top drivers of poverty in South Africa while the contribution of services delivery and health is relatively small Lehohla, The recent slow pace of economic growth is also a fundamental factor that has contributed to the slow pace of poverty alleviation.
The income inequality statistics between and reveal that income inequalities have been rising in South Africa Stats SA, ; Stats SA, As of the above background, many radical voices are starting to point fingers to the negotiated settlement and compromises that were made in the negotiation table as a justification for their poverty and growing inequalities. For South Africa, the danger is more immediate because inequalities are along racial lines because even though it has been 20 years into democracy, economic privileges are still drawn between racial lines.
In this case, one of the foremost drivers of inequalities is income disparities between the lowest earners and top earners. As a consequence of growing triple challenges unemployment, poverty and inequalities in South Africa, the country has recently been inundated by xenophobic attacks towards foreign nationals Hayem, Therefore there is growing despise towards foreign nationals and this has resulted in the undermining social cohesion.
Research by Uslaner has shown that segregation is one of the leading factors that drive down trust in communities. Social cohesion is thus undermined because of the racial socio-economic disparities and it is also undermined intra-racially because of the fight for resources with foreign nationals.
These underpinnings are promulgated by socio-economic inequalities that are mostly felt by those in the end of the social ladder and that is where most xenophobic attacks occur.
This therefore explains the nationalistic agenda that ends up being promoted instead of an inclusive agenda. It has to be also noted that inequalities are not only unique to South Africa, but it is a global challenge. As of this, the issue of inequality has become immediate in the global stage due to increasing levels of inequality in the rest of the world.
The case of South Africa is very much relevant to global inequality issues because it is the most unequal country in the world. The rise of radical left wing voices within South Africa and other economies is an affirmation that social cohesion is weakening because of grave inequalities. As a response to the highlighted problems that South Africa faces, the following recommendations are made.
The proposed recommendations are centred on the need to effectively redistribute socio-economic benefits. One of these resources is access to land and capital. Whilst other nations are suffering from an economy completely dominated by the majority of the population, South Africa suffers from the adverse of this. It is therefore important for South Africa to move towards policies that will redistribute the economy in order to curtail income inequality.
Such policies can be targeted at the following industries. Agriculture: The country needs to move towards progressive and radical policies on the land issue as access to land for Africans is still a barrier. There should be a speedy process in land reform in order to allow many communities to be involved in the agricultural process through the creation of community agrihubs to be championed by cooperatives.
Land reform and redistribution should be inclusive and benefit as many African people in order to attenuate increasing inequalities and access to land. Communities who get access to land for agricultural purposes should also be supported in order to increase the sustainability of agriculture and food security given that the African population is growing rapidly. This will allow communities to generate their own wealth instead of depending on the state.
The government has to have a clear intervention that targets black businesses when it comes to governmental spending. This will not happen overnight, but there should be gradual progress to realising this. Investing in transformation could lead to improved economic distribution for all South Africans. The government must accelerate its investment in emerging industrialists in order to expedite industrialisation process and job creation.
This could also lead to better service delivery and job creation for the majority of people mired in poverty. The government needs to also promote rigorous Black Economic Empowerment BEE policies that will be measured in terms of results in the distribution of economy.
This will ensure that the redistribution of the economy is measured by the number of hands that are equally benefiting from the economy rather than participants in the economy. Tackle corruption in the public and private sector.
This will ensure that there is sufficient money to deliver basic services to communities. This is because many inefficiencies emanate from mismanagement and maladministration from the public and private sectors. This undermines the good intentions of equitable redistribution. This includes illicit capital flows that are stealing the future of millions of South Africans.
This can be done through introducing stronger and rigid tax systems that will limit tax evasion and illicit cash flows. The best possible way of going about cutting income inequality and at the same time act as a response to poverty is through increasing the minimum wage and also protecting informal workers. South Africa has already adopted a minimum wage which is R per month and R20 per hour.
However, the problem is that this minimum wage is below the poverty line. This therefore means that even if the wage increase is effective, people will still be mired in poverty. South Africa should look at increasing the minimum wage to a standard of living that is acceptable in order to reduce poverty and income inequality. This can be done through focusing on the household level rather individual level when benchmarking the minimum wage.
It is important to note that the average monthly earnings of Africans are not increasing at the same pace as of white counterparts. Therefore government should implement policies that will prioritise increasing wages for people who are in the lowest income order. This will ensure that some progress is made in decreasing income inequalities and poverty.
Through adopting this strategy, the country could simultaneously address income inequality and poverty. This can go a long way in building up social cohesion and ensuring that societies are integrated.
Government needs to relook programmes aimed at reducing unemployment and poverty because current programmes are not yielding the necessary results. It is also important to restructure resource allocation towards those programmes. A lot needs to be done in terms of enrollment at higher education and job creation. Enhancing youth skills must be at the centre of solving high rates of unemployment. Access to quality basic and tertiary education among South African youth, as well as meaningful job creation will directly contribute towards economic transformation and addressing the triple challenges.
The government needs to promote programmes that are aimed at building social cohesion among citizens and foreign nationals. This can be done through cultural exchange programmes that will foster cohesion. The low levels of social cohesion are contributory to the current xenophobic attacks that the country is experiencing in some parts of Johannesburg and Pretoria. The government must accelerate service delivery and work with the private sector to accelerate job creation to ensure that citizens have a safety net.
This will in turn improve social cohesion and diminish xenophobic attacks because poverty, unemployment scarcity of jobs and lack of service delivery have been the foremost drivers of xenophobic attacks. Income equality can lead to better socio-economic conditions for citizens and strengthen social cohesion. Therefore, government must ensure that income equality is adhered to in the workplace.
This can also be done through investment ventures that are aimed at creating inclusivity by involving multiple ethnic groups. The authors are solely responsible for the content and their views do not necessarily represent the views or recommendations of their related institutions.
Both challenges are global in nature and require a universal, integrated, and transformative response. Countries have introduced significant measures to contain the coronavirus pandemic that has severely damaged the tourism economy. Countries are moving beyond immediate, often economy-wide, support measures to develop specific recovery measures for the tourism sector, including lifting travel restrictions, restoring traveler confidence, and rethinking the future of the tourism sector.
An […]. The digital sphere of today is associated with various problems that ultimately threaten our economic systems, democratic processes and cohesion of societies. Challenge Inequalities are drastically becoming one of the foremost challenges that the world is facing due to the disparities between the rich and the poor especially in developing countries.
Proposal As a response to the highlighted problems that South Africa faces, the following recommendations are made. Increasing spending in black businesses The government has to have a clear intervention that targets black businesses when it comes to governmental spending. Corruption Tackle corruption in the public and private sector. Increasing the minimum wage The best possible way of going about cutting income inequality and at the same time act as a response to poverty is through increasing the minimum wage and also protecting informal workers.
Unemployment and poverty Government needs to relook programmes aimed at reducing unemployment and poverty because current programmes are not yielding the necessary results. Social Cohesion The government needs to promote programmes that are aimed at building social cohesion among citizens and foreign nationals.
Defining poverty, extreme poverty and inequality
Skip to search form Skip to main content You are currently offline. Some features of the site may not work correctly. Berg Published South African poverty and inequality are strongly rooted in the labour market. Despite the continuing relevance of race, labour market race discrimination has declined as cause of inequality compared to other factors also often correlated with race e. Moreover, if cognisance is taken of large differentials in educational quality, the residual earnings differentials ascribable to labour market race discrimination may well be small. Save to Library.
Using the South African population census, we provide income and multidimensional poverty and inequality estimates at the municipal level. We go on to estimate a spatial econometric model to identify the correlates of poverty across municipalities in South Africa. Our results show that both income and multidimensional estimates of poverty and inequality vary significantly across municipalities in South Africa. In general, areas that are historically characterized by low economic and welfare outcomes still experience significantly higher poverty and deprivation levels. Using both global and local spatial autocorrelation measures we find significant and positive spatial dependence and clustering of regional development indicators. The situation of poverty is both spatially unequal and autocorrelated. Results from our spatial econometric analysis indicate that there is a negative and significant relation between the municipal poverty levels and local levels of education and economic activity GDP per capita.
Inequality in South Africa
This paper analyses poverty and inequality in South Africa based on data from a comprehensive multi-purpose household survey undertaken in to provide baseline statistics on poverty and its determinants to the new government. The paper shows that South Africa has among the highest levels of income inequality in the world and compares poorly in most social indicators to countries with similar income levels. Much of the poverty in the country is a direct result of apartheid policies that denied equal access to education, employment, services, and resources to the black population of the country. As a result, poverty has a very strong racial dimension with poverty concentrated among the African population. In addition, poverty is much higher in rural areas, and particularly high in the former homelands.
The South African education system, characterised by crumbling infrastructure, overcrowded classrooms and relatively poor educational outcomes, is perpetuating inequality and as a result failing too many of its children, with the poor hardest hit according to a new report published by Amnesty International today. Broken and Unequal: The State of Education in South Africa calls on the government to urgently address a number of endemic failings in the system in order to guarantee the right to a decent education for every child in South Africa. The report particularly highlights poor infrastructure in public schools including sanitation which has tragically resulted in the death of two children in pit latrines in recent years. The report details how the education system continues to be dogged by stark inequalities and chronic underperformance that have deep roots in the legacy of apartheid, but which are also not being effectively tackled by the current government. For example, it brings to the fore that many schools and the communities they serve continue to live with the consequences of the political and economic decisions made during the apartheid era where people were segregated according to their skin colour, with schools serving white communities properly resourced.
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Poverty, Inequality and Deprivation in South Africa: An Analysis of the 1993 SALDRU Survey
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How Inequalities undermine Social Cohesion: A Case study of South Africa
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