SA’s growing middle class could help bring about change

When the chronicler of the bubonic plague, Gilles Li Muisis, noted that “Neither the rich, the middling sort, nor the pauper was secure; each had to await God’s will” he unwittingly provided historians with a flashlight moment. The middle class — even then — was a societal norm. 

There has probably always been a sort of middle class in all societies but it was after the plague and what followed that it bedded down as a core societal structure.

Historically, a key driver in creating a buoyant middle class was quality public services. China is richer today than Britain was in 1948, when the National Health Service (NHS) was introduced. In the US, the New Deal was established in the 1930s. Germany actually started its social security programme in the 1880s. These programmes led to a rapid expansion of the middle class.

This social compact is now fraying in rich countries as the middle class gets squeezed.

The opposite is happening everywhere else. Within the coming decade, based on forecasts, a majority of the world’s population could have middle-class lifestyles for the first time. Growth in the middle class means more spent on health and education, leading to higher productivity. It creates political stability through an increased demand for accountability and good governance. In terms of national economic and social development, the middle class is the secret sauce.

The evidence that the middle class is a key driver of democracy is a bit mixed. In China it has not been. In Thailand in 2014 the middle class actually drove the return to a military government. Similarly in Egypt. Yet in Indonesia, South Korea, Brazil, Tunisia and the Philippines it was the middle class that kicked out dictators. Perhaps a more realistic measure is the concern of the middle class that the political establishment is endangering their hard-fought-for wealth. 

In March 2013 more than 16,000 dead pigs were found in the Huangpu River, which supplies some of Shanghai’s drinking water. It was a seminal moment, not for the act itself but the reaction. Public outrage took to social media. This was the announcement that China’s middle class wouldn’t put up with this kind of crap any more. The authorities moved quickly to clean up the mess.

Maybe I am too optimistic, but perhaps the personal protective equipment tender scandals or tardy vaccine rollout are this country’s “pigs in the river” moment. It is too early to say, but developments at Luthuli House this month give some encouragement to that view.

While the middle class in this country is far too small, that is changing. The ANC’s January 8 statement in 2018 said the black middle class had grown from 1.7-million to 6-million in the previous five years. The World Values Survey for SA saw 62% of black South Africans say they were lower or upper middle or above (it is a self-selecting measure so caution is needed with the figure, and it’s from eight years ago).

In its 2017 Global Wealth Report, Credit Suisse estimated 29% of black South Africans were middle class, and a 2018 report by the department of planning, monitoring & evaluation, in co-operation with Stats SA and the World Bank, put the figure at 25%.

More recent data suggests the black part of SA’s middle class has consistently grown and now represents the majority. A study by Ronelle Burger of Stellenbosch University estimated the black share doubled from 32% in 1993 to 64% in 2012. Another paper, by  Rocco Zizzamia, Simone Schotte and Murray Leibbrandt, estimated that it rose from 47% in 2008 to 64% by 2017.

However, a good chunk of the black middle class is located in the public service. There is a limit to this growth (well, there definitely should be). Meaningful growth in the black middle class will need to be firmly centred on the private sector. That opportunity is coming.

After the Spanish flu, the 1920s was a decade of huge growth and creativity, boom times in every way. We can expect something similar in the 2020s, with an explosion of pent-up demand. This presents an opportunity to grow SA’s middle class to reach a critical mass.

How to you know when you have reached a critical mass of middle class? A colleague of mine once said a country is rich when rich people use public transport. By that measure, sadly we are a way off.

• Rynhart is a specialist in employers’ activities with the International Labour Organization, based in SA. He is author of 'Colouring the Future: Why the UN Plan to End Poverty and Wars is Working’.