Wealth gap unchanged since apartheid, study finds
More than a quarter century of democratic rule has seen the growth of a black middle class and a black business and political elite
The social architecture formed over more than three centuries of white rule has maintained SA’s position as the world’s most unequal society, according to the Thomas Piketty-backed World Inequality Lab.
Attempts by the democratic government to wipe away the legacy of apartheid and colonialism have failed to narrow the imbalance between rich and poor, with 3,500 adults owning more than the poorest 32-million people in the country of 60-million, it said in a report released this week.
“There is no evidence that wealth inequality has decreased since the end of apartheid,” the group said. “Asset allocations before 1993 still continue to shape wealth inequality.”
More than a quarter century of democratic rule has seen the growth of a black middle class and a black business and political elite. Yet, most South Africans still suffer from a woeful education system that leaves them ill prepared for jobs.
Discontent with economic prospects and an unemployment rate of more than 30% has stoked unrest in SA. That’s limited expansion and curtailed investment.
Laws ranging from affirmative action to mandating minimum black-owned stakes in businesses have done little to narrow inequality, according to the group.
“SA’s successive governments endorsed several ambitious socioeconomic policy frameworks whose primary objectives consistently included reducing economic inequality inherited from colonial and apartheid regimes,” it said. “Yet, wealth inequality has remained remarkably stable.”
In the country, the richest 10% of the population own more than 85% of household wealth, while over half the population have more liabilities than assets, the report showed. That gap is higher than any other country for which sufficient data is available, the group added.
While blacks have outnumbered whites in the richest 10% of the population for about 7 years, the gap between the richest and poorest hasn’t narrowed as the decline in racial inequality has been driven almost entirely by a surge in the top black incomes rather than increased wealth for the poorest, according to World Inequality Lab data.
The report was based on data gathered from 1993 to 2017 and was authored by Amory Gethin, of the World Inequality Lab, which is linked to the Paris School of Economics, together with Aroop Chatterjee from the Wits Southern Centre for Inequality Studies and Leo Czajka of the Universite Catholique de Louvain in Belgium.
– Bloomberg News. For more articles like this please visit Bloomberg.com.
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