HAROON BHORAT: SA’s missing middle
To address SA’s inequality, we need to understand the roots of our wage disparity. The problem lies right in the middle – not at the bottom or top
It is common cause that income inequality in SA is among the highest in the world. Since 1994, there have been various economic and political reforms to address this and to redistribute economic power. Examples include a progressive tax system, social grants for the poor and employment equity legislation.
However, in the 25 years since the end of apartheid, inequality has not only remained stubbornly high, but has increased significantly. SA’s Gini co-efficient — a measure of inequality where a higher number denotes a greater level of inequality — increased from 59.3 in 1993 to 63 in 2014. This is unlike other developing countries with similar problems. In Brazil, a common comparator with SA, the Gini was 63.3 in 1989, but it had dropped to 51.3 by 2015.