Employment is the key to reducing inequality

18 years after the end of Apartheid, South Africa is still a country of insiders and outsiders. The insiders have access to jobs, income, skills and assets, but the excluded live in poverty, without skills and without jobs.

According to a study conducted by the South African Institute of Race Relations, for every R7.70 a white South African receives in income an African South African receives R1. This gives a ratio of 7.7 to 1. To arrive at these figures the total income of all people in the particular racial group was divided by the total number of people in that racial group.

However, data obtained from Statistics South Africa on average monthly earnings shows that the ratio of white to African earnings of the bottom 5% of earners is 3.4 to 1, for median earners 4.2 to 1, and for the top 5% of earners 2.7 to 1.

In other words, when only employed people in each racial group are taken into account, the discrepancy is far smaller than when everyone, including the unemployed, is combined.

Incomes include earnings, grants, investment income, and other revenue from the Government. Earnings refer mainly to wages and salaries of employees.

The above ratios show that when the degree of inequality between income and earnings distributions is compared, the biggest inequality in South Africa is between the employed and the unemployed and that income inequality is heavily the result of high African unemployment. If you take into account that half of all working-age white people are employed compared to only one out of four African people, it stands to reason that if we want to combat inequality we need to focus on fuller employment.

It is only by generating much more employment – and fixing a flawed education system that leaves many Africans with few marketable skills – that the country will be able to reduce inequality.

This data further illustrates the ANC’s inability to create an environment where more can be employed – In fact the unemployment rate has increased dramatically since Jacob Zuma took office.

The DA has a plan to break down the barriers that keep so many locked out of opportunity. We plan to generate a dynamic economy that includes everyone. Our plan paves the way for a very different future: one of innovation, entrepreneurship, investment and growth.

The DA’s Growth and Jobs plan outlines how the DA will reduce poverty and create jobs by putting South Africa on a high-growth path. Our plan outlines how the DA will break down the barriers to opportunity by allowing an open and inclusive economy to develop in which each person has the skills and the resources to become a productive member of a dynamic, integrated and forward-looking society.

The document below outlines how we will build this new society of opportunity. http://www.da.org.za/docs/13004/DA%20Plan%20for%20Growth%20and%20Jobs.pdf