How to stop SA’s looming class war

LAST Monday it was reported that informal settlement dwellers had clashed with residents of Protea Glen over illegal land occupation. For those who may not know, Protea Glen is in Soweto and consists mostly of bonded houses owned by the emerging black middleclass – teachers, police and nurses.

The residents reportedly said they did not want informal settlement dwellers to invade land in their area as it would devalue their properties, and potentially create a breeding ground for crime and lawlessness.

This incident might have brought to the fore what we can expect in the future on two fronts – if migration and fiscal policies are not reviewed.

First, one of the most positive developments since 1994 has been the rise of a black middle class. According to the Unilever Institute for Strategic Marketing at the University of Cape Town, SA’s black middle class more than doubled from 2004 to 2013, reaching 4.2 million. That constituted 51% of the 8.3 million middle-class households in South Africa.

In making the ANC’s January 8 statement in East London this year, President Cyril Ramaphosa said the black middle class had grown to six million households to date.

To put the middle class into context, Credit Suisse’s Global Wealth Report defines the global middle class, including the ultra-middle class, as that group of people whose annual net worth is between $10 000 and $100 000 (about R125 000 and R1.25million currently).

The middle class is important because it is through this group that modern societies are sustained and maintained. The middle class contributes more than 50% of the national fiscus through taxes and consumption. It is therefore the heartbeat of any economy.

The figures of growth highlighted indicate a positive trend in the sense that, since 1994, a significant number of black South Africans have seen their standard of living improve significantly.

A peculiar aspect about South Africa’s black middle class though, as compared to other races, is not only its continued contribution to the national fiscus but the fact that a significant majority of these people support extended family members who may be unemployed and/or at school. This is known as “black tax”.

Secondly, there has also been a steady increase in the proletariat – those who live below the middle-class benchmark, including job-seekers.

This has outpaced the growth of the middle class in terms of numbers.

The proletariat is the class of wageearners whose only possession of significant material value is their labour power (their ability to work), thereby providing cheap labour.

Even though a significant number of black South Africans have been elevated to middle-class levels, the country has struggled to free itself from the shackles of cheap labour as inherited from the apartheid era. Indeed, this class has been somewhat maintained and sustained since 1994.

But the result of an increasing proletariat is that, inevitably, it leads to a clash of the classes as the working classes start to demand better conditions of living.

How was the proletariat created in SA and then sustained? The apartheid regime created homeland states and townships as pools of cheap labour for industries in urban centres. These were mainly mineral related, such as mining.

It was via this conveyor belt of cheap labour that the country was maintained during the international trade sanctions of the apartheid era.

Post-94 this system of exploitation has been left mostly untouched.

The Marikana tragedy is a classic example of the rise by the proletariat against exploitation. And the scuffles at Protea Glen again bring to the fore agitation by the proletariat and unemployed over the slow progress in meeting their basic needs.

Perhaps the salient point about Protea Glen is that post-94 the country still has a conveyer belt of cheap labour running from the rural hinterland to industries and urban centres, thus creating an unsustainable service delivery backlog in many of our cities.

Fiscal policy review is needed if we are to address this bottleneck.

But first, the country’s migration policy must be reviewed.

According to Statistics SA the highest levels of migration have been registered in Gauteng (981 290 people incoming between 2011 and 2016), the Western Cape (292 372), North West (97 784) and Mpumalanga (64 003).

The biggest losses were in the Eastern Cape (an exodus of 326 171 between 2011 and 2016) and Limpopo (145 767).

Migration patterns to urban centres will continue to outpace service delivery capacity if the current fiscal formula, such as the equitable share grant, is not amended and still favours urban provinces such as Gauteng and Western Cape.

SA’s intergovernmental fiscal relations are characterised by provincial governments having more expenditure functions than they can finance from their own revenue sources. In fact, provinces collect, on average, less than 3% of their revenue from their own sources. This makes provinces largely dependent on national government for funding to perform service delivery functions.

It is therefore important that rural provinces, such as the Eastern Cape, are given preferential fiscal allocations if we are to mitigate the current migration patterns.

Doing so could restore the dignity of many proletarians who leave their homesteads to search for economic prosperity in urban provinces, only to find themselves in almost uninhabitable conditions there.

Failure to remedy this will inevitably lead to a clash of the classes as we have seen in Protea Glen, and will ultimately create longterm instability for South Africa.

Dr Thabile Sokupa is head of projects at the University of the Western Cape. He writes in his personal capacity