Tackling Inequality Sustainably Beyond Social Grants

The lives of many South Africans are shifting for the better, but not quickly enough. As Cyril Ramaphosa takes South Africa into a new chapter, government needs to look at what has worked and what has not and make wise policy choices that will deliver on the ANC’s overdue promise of a better life for all.

South Africa remains one of the most unequal nations in the world, and recent research into the drivers of inequality has lifted the lid on pervasive issues contributing to this. The results name the vast wage gap as a major contributor. There are a few who earn millions, too many who are earning vulnerably small incomes, and many who are unemployed with no earnings at all.

The research, titled The Drivers of Inequality in South Africa, analysed the development of income inequality over the past 20 years. This was done by using household survey data from the Department of Planning, Monitoring and Evaluation’s (DPME’s) National Income Dynamics Study (NIDS), for the period 2008 to 2014/15, and data from the 1993 Project for Statistics on Living Standards and Development (PSLSD). By analysing the income dynamics of households, the research found that although inequality started to fall in democratic South Africa, there remains an urgent need for further improvement, and that some current solutions, including social grants, which are particularly helpful to the poor, are not sustainable long term.

Read more on the Daily Maverick website.