A new study by the University of South Africa’s (UNISA) Bureau of Market Research shows that the lopsided growth in the top income bracket reached more than 50 percent in 2008, while those earning less than US$5,000 per year fell by less than one percent and still comprised more than 75 percent of the population.
"If you look at the economies of comparable countries and apply those employment rates to South Africa, we are missing 6.2 million employment opportunities," said Carel van Aardt, who co-wrote the study. "Basically, if you are unemployed right now, your chances of getting a job are limited."
Skills shortages and rigid labour laws are among the factors keeping poor South Africans poor. "With the onset of a knowledge economy, there has been a decreased absorption of unskilled workers and an increased absorption of skilled workers," he pointed out. "And we’re not talking about someone having a matriculation [school-leaving] certificate – these [should be] real labour market skills, in high demand."
Independent economists and analysts have put unofficial unemployment rates as high as 40 percent. Van Aardt suggested a possible remedy would be the realignment of the education system to provide graduates with the skills the country needs – a shift that cut unemployment in countries like Ireland, and which will soon be implemented in neighbouring Namibia.
Even those with some skills face an uphill battle in the current job market, where rigid labour laws make casual workers easier to hire.
Trying to make a dollar out of five cents
Mirriam Mzilwa is well-spoken, intelligent, entrepreneurial, and also employed, yet she is one of the many of the working poor who still battle to put food on the table.
"I struggle. Everything costs more and I have to do it all myself," the single mother of three told IRIN. "At the end of the month, sometimes I have nothing. Luckily I use my mind, I tell myself: ‘I have to do something on the weekends.’"
During the week Mzilwa has a job as a domestic worker; on weekends she sells anything and everything, as she has done for the last decade. When her youngest son was still small enough to fit on her lap – saving her the extra bus ticket – she bought leather coats from second hand dealers in Johannesburg and sold them for double the money in Namibia.
Musician-turned-cleaner Crosby Moatshe, 32, earns $260 a month, which barely covers expenses for himself and three children each month:
Transport                         $48
Rent                                  $50
Food                                  $75
School fees and bus fare  $50
Loan repayments              $15
Total                                $238
Money left for clothing, medical and dental, and all other expenses -Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â $22
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Her son is now 13 years old, and she can neither afford to leave him alone at home, nor the extra bus ticket, so she sells everything from herbal tea to mosquito repellent and curtains, travelling the country on weekends and holidays to sell her goods, often to customers who pay for a $35 set of curtains in instalments.
Mzilwa’s enterprise helps supplement her monthly wage of $200 as a domestic worker, which is not enough to support her and her family and still pay the rent on a bachelor apartment, but is still about $83 more than the industry standard, according to the Department of Labour. "You know, I’m crazy," she jokes. "I’m always chasing money – I just never get it."
The rat race
Chris Hart, chief economist at Investment Solutions, a financial research firm, said income inequality was almost a given in emerging markets like South Africa, and were even taken as an initial measure of economic health.
Both Hart and van Aardt agreed that while the country’s pattern of rising inequality was no different to other emerging economies like China and Brazil, most economists would have expected the inequality to level off at this point, 15 years after the election of a democratic government in 1994.
"The quality and number of jobs have improved, but not really enough to eliminate the backlog in a reasonable amount of time," Hart said. "The South African growth rate has not met that of other emerging market peers – that’s the big shift that needs to take place."
Taking into account the global economic slowdown, the International Monetary Fund projected a gross domestic product (GDP) growth rate of around 3.8 percent for South Africa in 2008 as against around 9.7 percent for China and 5.2 percent for Brazil.
Part of the delay may stem from what he called the "unintended consequences" of social policies like the Black Economic Empowerment (BEE) programme, meant to address the economic inequities of apartheid.
"[With BEE] you’ve had a very narrow focus. It has helped to create new breed of very wealthy black business people but hasn’t actually filtered through to the grassroots level," Hart said.
The mirror of election politics
The failure of these policies to uplift the poor has not gone unnoticed as the country prepares for national and provincial elections in the first half of 2009. The African National Congress (ANC), which has ruled since 1994, acknowledged the wealth gap in its recently released 2009 election manifesto.
The party said more needed to be done to stem the growing disparity between rich and poor, including tackling underemployment by supporting labour-intensive industries to create more jobs, as well as extending social grants and linking them to compulsory education.
About 12.3 million South Africans, in an estimated population of 48 million, receive some form of official financial assistance, mostly the monthly child support grant that provides low-income caregivers with $23 per child, according to the government’s South African Social Security Agency. The ANC manifesto says the party wants to extend the social safety net to more of the unemployed.
Neva Seidman Makgetla, an economist and sector strategies co-ordinator in the Presidency, said the ruling party hoped to address inequality mainly through job creation in the agricultural and light industrial sectors, which government policy currently tended to neglect, as these were among the more labour-intensive sectors in need of government support.
However, organisations like the Congress of South African Trade Unions (COSATU), the largest grouping of industrial and mine workers, said inequality continued to divide the country, and was exacerbating the existing problems caused by poverty.
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