Poverty debate must include black middle
October 17 marked the 25th anniversary of the declaration of the international day for the eradication of poverty by the UN General Assembly.
It passed quietly in most parts of the world considering the more urgent news around the world.
That day, there was a drive-by mass shooting in New York; and the news that Spain’s national court had denied bail to Jordi Sànchez i Picanyol, the president of the Catalan National Assembly, and Jordi Cuixart, the president of Òmnium Cultural, an organisation that promotes Catalan’s language and culture. Pending investigation both men are the leaders of the call for cessation of Catalonia from Spain.
Also on the day, South Africans woke up to news that the personal records of about
31.6 million South Africans had been leaked online. But this was not the biggest local news of the day. President Jacob Zuma’s second Cabinet reshuffle in a year was.
All the above events overshadowed the international day of eradicating poverty. For most countries, this debate will be deferred to next year – if other events such as the above do not stand in the way. There are no guarantees, of course. But colourful events (tragic as some are) should not eclipse the enduring tragedy of the poor.
In South Africa, over half of the population (55%) live below the country’s upper poverty line of R992 per person per month. If we consider the national average household size of four, this translates to a R 3 968 household monthly income – which is just about the national minimum wage (R3 500). The percentage of the population whose hunger is induced by poverty rose from 21.4% in 2011 to 25.2% in 2015. This was what the news should have been about on October 17.
In his book, Capital in the Twenty-First Century, Thomas Piketty suggests that inherited wealth is the most effective way of addressing poverty. He bases his argument on the theory that income from assets (capital income) and not income from employment (labour income) is a more sustainable way of creating wealth.
Piketty’s argument presupposes a middle class which has already accumulated wealth, and is able to transmit it to the next generation. In this way we can think of addressing the kind of poverty which has tended to last from one generation to another.
Over the long haul, the debate in South Africa has focused on poverty alleviation through employment, or labour income. There has been a lot of focus on providing jobs to the poor, but the black middle class does not seem to feature anywhere in the poverty alleviation debate. Research on the black middle class often focuses on their consumption – how they dress, what cars they drive, where they go for leisure. Implicitly, Thomas Piketty suggests that we look to the country’s black middle class if we want to address poverty meaningfully in the next generation.
The black middle class, however, is not well positioned to accumulate wealth for the next generation. Most black South Africans in the middle class are employed by the state. State employment, for example, has increased from 2.4 million in 2009, to 2.7 million in 2017.
The black middle class started to expand rapidly only after 1994. In 1993, the number of people in the black middle class was estimated at 300 000, compared with 3 million in 2015. Those who work for the state receive higher wages than in the private sector. However, Professor Deborah James’ research has shown that most of them are heavily in debt, not necessarily the kind of debt which comes from accumulating assets, but the kind that is based on social dependencies and mutual obligation.
The black middle class, therefore, relies on labour income to provide for the needs of relatives and to maintain their lifestyle. Their children might go to private schools, but there is little else to transmit to them in the form of wealth. The role of the black middle class in addressing poverty is a blind spot in South Africa’s poverty debate.
The increase in unemployment from 21.5% in 2008 to 27.7% in 2017 means that the black middle class is even more obligated to look after unemployed relatives, and therefore less able to accumulate wealth, which in turn affects poverty alleviation efforts in the next generation. What is worse, some of the black middle class have fallen into poverty, eliminating the chances of inter-generational poverty alleviation in a particular household.
For example, between 2011 and 2015, three million more people became poor in South Africa. This is largely “poverty from above”. Individuals with some form of employment but no assets to fall back on during economic shocks lost their labour income and fell back into poverty.
Perhaps then, in South Africa, the next international poverty eradication day should be a black middle class day, not necessarily to celebrate its achievement, but to find ways to facilitate asset accumulation in this section of the population.
But that will be six months before the next general elections, and therefore a political eclipse of the day is highly likely.
In the next 25 years, South Africa could change the current picture of widespread and deep poverty in a significant way – but only if we bring the black middle into the poverty alleviation debate.
Musyoka is a postdoctoral fellow at the Human Economy Programme, the Centre for the Advancement of
Scholarship, University of Pretoria