SA still one of most unequal countries in the world – study

South Africa is still one of the most unequal countries in the world. this inequality is demonstrated by the fact that the bottom 50% earn R12 340 and the top 10% R780,3000, with the top 10% earning more than 65% of total national income and the bottom 50% just 5.3%.

According to the 2022 World Inequality Report, available estimates seem to show that income inequality in South Africa has been extreme during the 20th and 21st centuries, with the income share of the top 10% oscillating between 50 and 65%, while the bottom 50% never managed to obtain more than 5%-10% of national income.

Economic inequalities persisted and even worsened even after the end of apartheid in 1991, when democratic rights were extended to the whole population. Post-apartheid governments failed to implement structural economic reforms, including land, tax and social security reforms, sufficient to challenge the dual economy system.

The richest South Africans have wealth levels that broadly compare to affluent Western Europeans, owning close to 86% of total wealth. However, the bottom 50% own no wealth at all and have more debts than assets. Since 1990, the average household wealth for the bottom 50% has remained under zero.

ALSO READ: Billionaires got richer during the pandemic – report

Gender inequality

This is one category where South Africa stood out as an exception in the sub-Saharan region. The country’s female labour income share is equal to 36%, significantly higher than the regional average of 28%.

Gender inequalities in South Africa are comparable with levels in Western Europe, where the average earnings of women are equal to 38% of total national income on average. At global level gender inequalities remain considerable and progress within countries is too slow.

In a gender equal world, women would earn 50% of all labour income, but globally their share of total income from work was close to 30% in 1990 and is only less than 35% today, with current gender earnings inequality remaining very high.

Global gender equality progressed very slowly in 30 years, with different dynamics in different countries resulting in some recording progress but others seeing reductions in women’s share of earnings.

ALSO READ: World Human Rights Day: South Africa’s shameful record laid bare

Carbon inequality

South Africa is one of the highest emitters in Africa, with average, GHG emissions per capita equal to 7.2 tCO2e/capita, slightly less than in China (8.0) and France (8.7), but considerably more than in other African countries, such as Kenya (1.4), while it is also well over the sub-Saharan African average.

On average, the top 10% emit 10 times more emissions than the bottom 50%. Since the early 1990s, these high levels of carbon inequality have remained constant.

ALSO READ: Social justice rooted in equality – Madonsela

Global income

It seems that global inequalities are about as great today as they were at the peak of Western imperialism in the early 20th century. While the current share of income for the poorest half of the world’s people is about half of what it was in 1820, before the great divergence between western countries and their colonies, there is still a long way to go to undo the global economic inequalities inherited from the very unequal organisation of world production between the mid-nineteenth and mid-twentieth centuries.

This is illustrated by the large inequalities in contemporary income and wealth, with an average adult earning PPP (purchasing power parities) €16,700 ($23,380) per year in 2021 and owns €72,900 ($102,600).

These averages hide wide disparities between and within countries, with the richest 10% of the global population currently claiming 52% of global income, while the poorest half earns only 8.5%. On average, an individual from the top 10% earns €87,200 ($122,100) per year, while someone from the poorest half makes €2,800 ($3,920) per year.

ALSO READ: Inequality: Richest 0.01% in SA own more than poorest 90% combined

Global wealth

In addition, global wealth inequalities are even more pronounced than income inequalities, with the poorest half of the global population barely owning any wealth at all at just 2% of the total. Compare this to the richest 10% who own 76% of all wealth.

The poorest half of the population owns an average of PPP €2,900 per adult ($4,100), while the top 10% own an average of €550,900 (or $771,300).

The report also indicated that while nations have become richer, governments have become poor considering the gap between the net wealth of governments and that of the private sector. The share of wealth held by public actors is close to zero or negative in rich countries, meaning that the totality of wealth is in private hands.

Covid-19 has magnified this trend when governments borrowed the equivalent of 10-20% of their gross domestic product (GDP), essentially from the private sector.

The low current wealth of governments has important implications for state capacities to tackle inequality in the future, as well as the key challenges of the 21st century, such as climate change.