Economic apartheid still writ large

Income disparity also stark among black Africans

THE release of the Living Conditions Survey by Stats SA last week gave us a useful insight into the household consumption patterns of South Africans — and showed just how entrenched demographic economic inequality is.

The data, which covers 23 380 households over a 12-month period, makes horrifying reading, especially as it relates to black-headed households versus white-headed ones.

The top four spending categories by South African households are housing and utilities, transport, food, and miscellaneous goods and services.

Poorer households (read black) in the lower deciles spent close to 40% of their total expenditure on food. On the other hand, households in the top decile (read white) spent only 8% on food, although in rand terms they significantly outspent the poorer households. Wealthier households typically spend much more on housing and transport, therefore reducing the proportion of spending that would be allocated to food.

In short, poor blacks are barely surviving, while rich whites are prospering.

It would therefore be inadequate to read this survey on the basis of how the average South African household spent its earnings. Frankly, there is no such thing as the “average South African household”.

Statisticians tell us that in their field, the “mean” is the “average” of a set of numbers, where you add up all the numbers and then divide by the number of numbers. The “median”, however, is the “middle” value in a list of numbers or set of data, and as such is a useful measure of relative inequality in a set of numbers.

In determining the average South African household spend of R103 293 in 2015, the Living Conditions Survey would have taken total expenditure by all the households and divided it by the number of households, thereby treating all households as equals. But they are not. The survey shows that black African-headed households accounted for over half (52.8%) of all household consumption expenditure in 2015 but spent an average of R67 828 per household. White-headed households had the second-largest share, at 34.1% of all household consumption expenditure, but spent an average of R350 937 per household — five times more than their black African counterparts.

“When examining the median household consumption expenditure by population group, white-headed households remain rather well off with R256 159, which, unlike other groups, is not half their average. This highlights less inequality across white-headed households, as their median and average are more closely aligned,” says the survey.

“Unfortunately, in black African and coloured-headed households, the median was close to half their average, indicating greater disparity.”

In addition to the economic inequality between blacks and whites, black African-headed households are more unequal among themselves than any other demographic. It doesn’t bode well for a country where eight out of 10 households are headed by this demographic group.

On the positive side, the average annual household consumption expenditure for black African-headed households of R67 828 in 2015 is a 21.29% nominal increase when compared with R55 920 in 2011.

The increase for white-headed households in the same period came in at 11.57%.

In relation to income the picture is just as horrid.

“White-headed households on average earned the highest income at R444 446 per annum, followed by Indian/Asian-headed households with R271 621. Households headed by coloureds earned on average R172 765, while black African-headed households earned the least, at R92 983.”

This means white-headed households had an income roughly 4.5 times larger than black African-headed households and three times larger than the average national income

It tells us that the legacy of apartheid is alive and well. The systematic hierarchical structures of economic exclusion are still with us.

How else would you explain that even coloured-headed households have an income almost twice that of black Africans, who themselves earned a third of what Indian/Asianheaded households earned in 2015?

We continue to live in economic apartheid.

Khumalo is chief investment officer of MSG Afrika Group and presents “Power Business” on Power 98.7 at 5pm, Monday to Thursday

In short, poor blacks are barely surviving, while rich whites are prospering