Transformation at top will not result in equitable society
For at least a century, the meaning of liberation in SA has been contested. Does it mean equal rights and a more representative ruling class in both the government and business? Or does it mean a more equitable society and economy that give ordinary people a decent life?
The past 20 years have demonstrated the gaps between these two visions.
There has been progress towards promoting black people into positions of power in the economy and state, yet SA remains one of the most inequitable societies in the world. Today, official data show that black people make up about half the governing class: half of the top 5% of earners are black, as are half of both managers and employers in the formal sector (and a third of commercial farmers).
Still, in a country where 90% of the population is black, the glass is definitely also half empty. The figures are even less happy if we unpack them.
To start with, black bosses are disproportionately in the public sector, which accounts for only about a fifth of total employment. Four out of five senior managers in the government and state-owned enterprises are black, compared with one in two in the private sector. The public sector contributes only 13% of the top 5% of income earners, but 46% of black people in that privileged group.
And black people in senior management in the public sector were more likely than their white peers to have a university degree.
But the success to date underscores, even more, that lifting a few people into the top of the income distribution won’t in itself do much to bring about a more equitable society. For instance, there are just over 1-million senior managers in the formal sector. That is about 7% of all employed people and under 5% of the total working-age population. Expanding black employment in these positions won’t do much for the vast majority of working people.
It is surprising, then, that racial transformation at the top has come to dominate the public discourse on economic policy. The shift appears in the evolution of the concept of radical economic transformation. It started in the medium-term strategic framework in 2014 with the aim of promoting job creation and small business as well as more equitable ownership. It has since mutated to mean almost exclusively support for black-owned enterprise.
The deputy president managed to keep the medium-term strategic framework promise on the minimum wage. But other commitments — developing more equitable workplaces and pay scales, ensuring young people have access to the education and skills they need for employment, leveraging industrialisation off infrastructure provision and job creation in agriculture linked to land reform — have largely fallen by the wayside.
This situation is not all that surprising. Black businesspeople have the skills and resources to lobby for their interests, but low-income communities and working people find it difficult to get their interests into policy discussions.
Government institutions to prevent waste and corruption — Treasury rules, the justice system and annual plans — encourage departments to stick to easy and risk-free programmes.
In these circumstances, radical economic transformation has largely been reduced to a slogan to cover programmes that in practice support almost exclusively the relatively well educated and positioned.
Real transformation requires programmes that open opportunities for the majority of South Africans.