Howard Barrell
A small black economic elite has benefited most from the democratisation of South Africa over the past 10 years.
While the black share of wages, salaries and other income in South Africa rose dramatically over the five years to 1996, almost all of this increase occurred among the top 10% of black earners, while poorer blacks actually experienced a decline in income.
These conclusions are contained in a report released late last year by South African researchers at Wharton Economic Forecasting Associates, an international economic consultancy.
The report, by Andrew Whiteford and Dirk Ernst van Seventer, investigates changes in income distribution between 1991 and 1996.
While the report confirms that racial inequalities of income persist – white per capita income was almost nine times higher than Africans’ in 1996 – it shows there has been a “significant redistribution of income towards previously disadvantaged population groups”. It demonstrates that the country’s economic elite is becoming significantly black, and that economic class divisions bear markedly less correlation to race than is commonly thought to be the case.
The report, entitled Winners and Losers: South Africa’s Changing Income Distribution in the 1990s, shows that the white share of total income declined from 59,5% to 51,9%, and the proportion of white households in the richest 10 % of South Africans declined dramatically from 95% to 65%.
Over the same period, the black share of income rose from 29,9% to 35,7%, and the proportion of black households in the top 10% of all South African households increased from 9% to 22%. There was, however, a vast difference in the economic fortunes of blacks over the period.
The richest 10% of blacks received an average 17% increase in income, while the poorest 40% of households actually suffered a fall in household income of around 21%.
In the five years to 1996, the coloured share of all income increased from 6,8% to 7,9%, and the Indian share rose from 3,8% to 4,5%. But inequalities of income between richer and poorer segments of both the coloured and Indian communities increased at the same time. There was a similar pattern among whites.