Global inequality

Capítulo 3
South Africa

Legacy of racism and slow labor market hinder social advances

With an unemployment rate of around 28 per cent, many South Africans spend their lives without work

Fernando Canzian
Cape Town

Patrizio Piraino

For economist Patrizio Piraino, from the University of Cape Town, a low growth rate and the legacy of apartheid are the major factors at the root of inequality in South Africa.

Many South Africans go through life without ever finding employment.

Patrizio Piraino, economist from the University of Cape Town - University of Cape Town

South Africa is the country with the highest level of inequality in the world, even now, 25 years after the end of apartheid. Why is inequality so great and persistent?

Inequality is very much connected to the labour market: there are tremendous differences between good and bad jobs. And a large portion of the population is unemployed, around 28 per cent.

On the other hand, you have people at the top of the wealth distribution whose salaries are comparable to what is paid in the US and Europe.

Sectors that could be labour-intensive, such as manufacturing, have not expanded at a rate that would enable much job creation.

South Africa has never been a place that was able to compete with sources of cheap labour, and this is also linked to the quality of people"s training.

Many sectors in this country, such as mining, are capital-intensive and don"t create a great number of jobs. There"s tourism and farming, but these areas are not able to transform our economy and absorb the unemployed.

It has been said that a South African may spend his life without finding work.

True, and this is due to a combination of factors. One of them is simply that our economy isn"t growing fast enough, due to weak demand. On the other hand, there are problems with the supply of labour, and this is due to an educational system that still struggles to educate part of the population.

Education is compulsory and has been successfully extended to all, but the schools attended by the poorest have far less resources and still struggle to provide students with the skills needed for the labour market. For this reason, people can indeed go through life without finding work.

But South Africa does have some welfare programs allowing you to survive if you can"t find a job. This is not what people wish for, of course.

Apartheid ended 25 years ago, and since then this country has been governed by black presidents. Could they have done better?

Before democracy, people were very precisely divided. A person"s skin colour dictated the opportunities they would have in life.

When apartheid came to an end, our economy was structured in this way, and the great expectation was that it would be transformed. That there would be more and more diversity. But this transformation has been happening at a much slower pace than was hoped for. More due to how the market works and less by the unwillingness of the leaders.

I believe that over the last 25 years the governments of South Africa have had to spend a substantial amount of money trying to help people in the lower part of income distribution. They have adopted policies to reduce poverty, but in a palliative way. And there has not been any kind of anti-inequality policy.

It is understandable when you have a large portion of population living in poverty, people who require help to meet needs as basic as eating.

A different educational system could have done a lot. Better training, with different kinds of incentives and responsibilities for teachers and headteachers.

We are still in a position in which our educational system reproduces inequality. Indeed, South African students perform worse than those of neighbouring countries.

We could do better, considering our neighbours may have fewer resources than us in terms of GDP.

Therefore, there is a problem in terms of how the educational system works. And I don"t think it is the fault of teachers, headteachers or the government. It is a combination of factors, but there is no doubt that something better needs to be done.

What role does land play in inequality?

Land distribution is unequal, and the good lands are in the hands of certain groups. We need to accept that historical irregularities took place and need to be fixed. How to mend this without creating too much disruption in the way economy functions - that is a difficult question.

But I believe most people agree that something needs to be done, and there are historically well-founded claims of land redistribution. It makes sense in theory to provide families with small units which would give them the opportunity to make use of these lands.

Does racism still play an important role in South Africa?

I think it is fair to say that discrimination is still a major problem. People still have prejudices. We need them to understand that this supposed superiority makes no sense. But that requires a cultural shift.

There is another type of discrimination, however, that is related to ignorance. To not knowing that people of all genders and all races can be good.

And this comes from a type of life experience that is limited to very particular environments.

Translated from the Portuguese by Clara Allain