Income Inequality in South Africa

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Leibbrandt and Shipp break down the source, cause and solution to the income disparity in South Africa. Their findings tackle how the bridge between the rich and poor, gender and racial inequalities, equalization workers’ wages and salaries, stability of the middle class and the division caused by the need for some form of tertiary education. This essay will explore a more circumstantial point of view towards their points.

The most unmistakable way to combat income inequality in South Africa is to address the networks of income as a whole. Thus meaning, we need to analyze statistically where, how and whom is the money of our economy branching towards. The prevalence of income inequality is due to the enormous gap between the rich and the poor. This gap allows people who are wealthy to stay wealthy and people who are poor to stay poor. People who have less skill are most likely to be more susceptible to low income and no employment. The solution to this problem is to implement education consistently at a young age, develop skills, and match people’s skills with their work as many people struggle to find jobs even after they have received education.

The need for educated people in South Africa has increased, this need enlarges the gap between the rich and poor. Everyone seeks the need to be sustained, secured and happy. This need and increased competitiveness, when it comes to your level of education, has caused income inequality to grow exponentially due to the fact that – people who are rich will have a better education and eventually end up in a high earning career field thus securing their wealth. People who are poor will not receive tertiary education, not getting a job and the cycle of poverty will continue.

The equalization of workers’ wages and salaries are deeply rooted in the dynamic problems of the business. Dynamic problems such as compensation discrimination which is when people work correctly and do not get paid equally as other people doing their exact same work. Once we extirpate discriminations against race, gender, age or sex, the salaries and wages of a certain career field will reach an equilibrium. The Government and businesses need to adopt improved policies that ensure workers are getting paid correctly and that no fraudulent crimes are occurring in the business.

Policies around wages, tax and social grants have reduced the income inequality to some extent but it is not sufficient. The sufficiency of these policies is reduced due to the poor services delivery and protection given by the government. The high level of corruption, fraud, immorality and unlawfulness in the government system has caused deficiencies in the policies that supposed to reduce income inequality such as rich people are becoming richer by coercing people in the workplace, citizens are not aware of their rights which means they become susceptible to exploitation like getting paid under minimum wage and lack of administrative structure which means grants are given to people who don’t qualify for it thus keeping the poor in poverty.

The socio-economic sphere of South Africa has been re-constructed, reshaped and repackaged into a sphere that marginalizes groups into minorities causing problems such as income inequality. Problems arise because people are deprived of their full potential – patriarchy in the work-place causes women to feel inferior which prevents them from working, discrimination because of your skin color, which results in people not making use of their opportunities and the lack of social reconciliation towards people who were affected by apartheid.

Due to apartheid majority of South Africans are situated in the middle-class working sector. The stability of the middle class will create a platform where income equality will be optimized. In relation to tax and transfer systems, the progressivity in South Africa should be improved. This means that people in the middle-class should not be paying for tax more than people who are in the upper-class (earning more money). Income inequality goes beyond income, in order to stabilize the middle income, we need to improve their working conditions, better their tax and transfer systems and consider their emotional well-being.

In South Africa, if you fall into the top earning bracket many things fall into favor. Firstly, fraudulent crimes become easier to get away with. Secondly, you have more security on your assets and can afford a lawyer. Lastly, it’s easier to accumulate generational wealth meaning that you will make it easier for your next generation to become wealthier. This causes income inequality as people who are rich stay rich and deprive people who actually worked instead of buying their way into something.

The decrease and increase in salary – a short term solution to our income equality problem. The gap in earnings between unionized and non-unionized workers will eventually increase so in order to end this problem is to improve the security system of how the income is being distributed and how the policies are being implemented. If this were to happen, less people will be paid under minimum wage, workers’ will be protected against discrimination, entrepreneurship will increase, more people will follow their passion and the gap between the rich and poor will decrease.

In order to address income inequality, we need to navigate towards a more liberal society that does not involve discrimination, an economy with a more stabled tax and transfer system, a country where income is distributed equally and improve our education system. Income inequality is a problem that multifaceted with many sources, causes and solutions. I believe that through more research such as this brief done by Murray Leibbrandt and Timothy Shipp, we are navigating South Africa to a destination of income equality.

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