Transformation’s final arbiters
There is no agreed way to gauge change
● A mantra carried in the winds to the ANC conference at Nasrec is that of “radical economic transformation”, which paints a picture of an economy that has failed to transform. While there are mountains to climb, there has been progress by the ANC government to change the economy. The problem is often about measurement of change.
“There is a huge lacuna of intellectual leadership in transformation. Perhaps one of the most immediate challenges is to ensure that we have an agreed survey method, survey frequency and an approach to measurement that is uniform and binding on all,” Trevor Manuel wrote last year.
“There are at least four survey reports available and generally in use — the Jack Hammer Executive Report; the Alternative Prosperity Report; the National Empowerment Ownership Survey; and the Empowerment Trailblazers Survey,” he wrote.
“I experience profound difficulty in traversing across these and seeking common method and agreed outcomes.
“I often pause while using these reports to question whether the analysts are even using the same raw data sets … regrettably, therefore, all these reports are treated with a dose of cynicism and are considered unreliable.”
Two additional sets of reports show how employment equity and black empowerment are changing the country, but not sufficiently. A Unilever Institute report shows that black people are making a rapid entry into the top income brackets, but successive annual employment equity reports show that the pace is not sufficiently fast to make a difference in who runs and manages the economy.
Top end is blacker
The Unilever Institute report, called “The Top End”, is a fascinating insight into South African households with the highest incomes. The quantitative and qualitative study of 20 000 respondents sought to deepen the anatomy of the 900 000 adults with incomes more than R30 000 a month.
The report found that black people make up 40% of these households, with most of them living in Gauteng, and that around half of entry-level top-enders are black, but that this drops to 29% of the wealthiest segment.
The Unilever Institute found the total group is responsible for nearly half of all personal income taxes but makes up less than 10% of taxpayers. They spend R300-billion annually.
Education is the best road to wealth: the report also shows that 75% of those in the top end have a tertiary qualification and 40% have one or more degrees. Researchers further broke this group of super earners into drivers, high flyers and astronauts. Drivers have a net worth of between R100 000 and R1-million — 49% are black.
High flyers have a net worth of between R1-million and R5-million — 33% are black. Astronauts are worth more than R5-million — 27% are black, the report found.
While the group has the most income in South Africa, only 3% regard themselves as wealthy. Half say they are reasonably well off and one in five say they are not very well off, including 10% of those with a net worth of more than R5-million. The drivers or entrylevel group are in at the deep end: the report found that 83% of the black people in this group are supporting family or friends versus 36% for their white counterparts.
One of the reasons that transformation feels like it is stalling and that radical economic transformation is necessary is that every annual employment equity report reveals a stasis.
The 2016 report shows that whites and Indians are over-represented in top management compared with their proportion to the economically active population. For example, whites make up 68.9% of top management compared with 9.9% of the economically active population.
The same is true for top management, but at the next level of workplace seniority, the professionally qualified, black (African) workers make up a greater proportion (41.2%) than whites (38%).
Pipeline of talent
Skilled technical workers show blacks at 58.8% versus whites at 22%. This means there is a pipeline of talent available to change the C-Suites, but that other push factors prevent black people from getting to the top.
Between 2014 and 2015 both white and male representation decreased slightly at top management and senior management level. Black African women remain the most vulnerable — about 43.4% were employed in low-skilled occupations.