Public Should Support Policies that Reduce Inequality

By Frank Meintjies · 27 Aug 2013

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Picture: Sony200boy/Flickr
Picture: Sony200boy/Flickr

South Africa is battling the curse of inequality. Inequality impacts profoundly on other key issues, exacerbating social ills, eroding community cohesion, fanning societal conflict and, for us, injects a sense of urgency into next year’s national elections.

We are reaping the fruit of inequality. All the signs are that inequality in South Africa is linked to the high levels of violence, the type and frequency of xenophobic attacks, the pervasiveness of gender-based violence and fragmentation of community life.

Inequality undermines attempts at building social cohesion. Far too many feel alienated and excluded in South Africa. Despite moments of national unity, old divisions between population groups resurface, gender oppression persists, attempts to dialogue about the past degenerate into fear and anger and the shadow of violence hangs over the industrial relations system. In poor neighbourhoods, community support systems co-exist with insecurity, feelings of dislocation and fear of crime. It is clear that, without greater economic inclusion, social cohesion – especially as government understands it – is a bridge too far.

Cities are focal points of inequality and its consequences. They are places of possibility and connection, but also zones of alienation and precariousness. Mustering bits of trust, people work together across the dividing lines; at the same time that trust is dashed and new cycles of mistrust begin. In this sense, our cities are places of love and hate. South Africans try to be a so-called rainbow nation; at the same time they live with security walls, gated communities on the one side and the experience of racial profiling, discrimination and exploitation on the other.

The facts of inequality are stark. The last census reported that, in 2011, the average Black African annual household income was R60 613 compared to the average annual income of white households of R365 134. In its work in a Gauteng township, the Studies for Poverty and Inequality Institute found that the average monthly household income was just R3131 and that most families in the township were “just getting by”.

While a huge percentage of households rely on government grants as their main income source, many of those who work remain in poverty’s grip. Near month-end, they fall short and have to eat less, borrow money or rely on friends and neighbours.  They certainly do not earn enough to improve their lot. ‘Just getting along’ means that the smallest shock – a fuel increase, a jump in food prices or a family emergency – often plunges a household into crisis. On the other end of the scale are the white headed households which receive up to ten time more than a township household and the top 20 percent of our society that, as Professor Sampie Terreblanche notes, enjoy 75 percent of the total income.

Also in the equation is the behaviour of companies that provide key services for the public but make super profits doing so. Leading the way are companies in the banking, telecommunications and the health sector. Such plundering behaviour, often facilitated by near-monopoly conditions, siphons wealth from the wider population to a few, widening the gap between the rich and the poor.

The annual wage increases should be a means to reduce inequality and division in South Africa. However, for the vast majority of workers, wage increases in the last decade have trickled along, notionally tracking inflation but falling behind the real cost increases that impact on the poor. At the same time, as the performance of the stock exchange tells us, companies have made enormous gains and directors and top executives have awarded themselves substantial salary increases and fat bonuses.

Inequality also shapes political expression. Because inequality is alienating, it fuels anger, mistrust and an absence of hope about the future. In this regard, there is clearly a link between inequality and heightened levels of protest action. More and more, people are giving up on avenues such as letters of complaint and meetings with councillors in favour of action in the streets. In addition, more protests and industrial disputes turn violent as community members and workers increasingly feel it is the only way to extract prompt and meaningful responses from decision-makers. Much in these protests are unconstructive and run counter to any sense of nation-building - libraries are burned down, learners boycott schools, fellow workers are killed, rubbish is strewn in city streets – but such responses spring from inequality and are now a part of South Africa’s reality.

Equality is an urgent matter not only for the marginalised and deprived. Inequality is bad for everyone. The London-based Equality Trust has examined “more equal” and “unequal” countries and measured them against a range of factors. It has found that health and social problems – child mortality, homicides, teenage births, drug use and so on – are worse in unequal countries. Inversely, it has found that there are higher levels of trust, less tension and, on average, a better deal for children in “more equal” countries. The Equality Trust also reports that the rate of imprisonment is higher in more unequal countries and that social mobility is low in unequal countries such as the United States and high in more equal countries such as Finland and Denmark. It compared rich countries, but it has also analysed rich and poor countries together, correlating social and health conditions with levels of inequality. The principle that unequal countries are worse to live in applies regardless of the per capita income of countries. South Africa thus sits on the same side of the spectrum of health and social problems as the United States.

South Africa needs to address inequality with vigour and utmost urgency. At one level, there is a question of the political vision and political will regarding inequality. All South Africans, in their own interests, should support political parties opposed to inequality in word and deed. They should also clamour to ensure that, regardless of shifts imposed by changing contexts, gains in terms of social security and free basic services are protected and strengthened.

Companies, or at least those operating out of enlightened self interest, should begin to realise that inequality poses a threat to notions of a stable democracy, a basic requirement for long-term business success. Corporations should consider measuring themselves against a Human Rights index for companies developed by the African Institute for Corporate Citizenship or subjecting themselves to the Benchmarks Foundation’s comprehensive rating tool which examines company impact on workers and affected communities.

Key government departments, especially those focused on land management, agriculture, fisheries, mining and enterprise promotion, should have explicit and measurable objectives to reduce inequality. Cities should develop strategies based on the principle of “the right to the city,” dismantling racist planning and ensuring the urban space is a resource that all can access.

Most important of all, as the Equality Trust argues, members of the public should become aware “of the damaging effects of large inequalities of wealth and income” and support campaigns, struggles and policies to reduce them.

Meintjies is an independent consultant and a Visiting Research Fellow at Wits School of Public & Development Management.

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