South Africa’s social and economic challenges

in the post-apartheid era

Institute of Social and Economic Research, Summer School,

September 2011

An outline of key social and economic challenges

Poverty Unemployment Income distribution The race and geography of multi-

dimensional poverty in SA The South African Constitution Social policy and economic policy

Poverty in post-apartheid SA

Poverty in post-apartheid SA

Poverty in its many manifestations (multi-dimensional) as ‘the’ challenge

What do we mean by poverty in post-apartheid South Africa?

How do we define and measure poverty in South Africa?

What assumptions inform our understanding and therefore the definition and measurement of poverty in SA?

Poverty levels in SA (1995) R301/mth

Poverty levels in SA (2004) R354/mth

National Poverty Line International Poverty Line

Population below the Poverty Line %

Population below$2 a day (%)

Population below$1 a day (%)

2002 1995 2002 1995 2002 1995

National 48.5% 51.1% 23.8% 24.2% 10.5% 9.4%

Male 45.9% 48.9% 22.6% 22.5% 9.9% 8.7%

Female 50.9% 53.4% 24.9% 25.8% 11.1% 10.1%

African 56.3% 62.0% 28.7% 30.4% 12.8% 12.0%

Coloured 36.1% 38.5% 11.2% 10.1% 3.6% 2.8%

White 6.9% 1.5% 1.4% 0.3% 0.4% 0.2%

Indian 14.7% 8.3% 6.1% 1.2% 3.1% 0.7%

Poverty levels in SA (2010) using different income poverty lines

Poverty measures 1993 - 2008

Year Population Poverty lineR949

Poverty LineR515

1993 40 147 932 72% 56%

2000 42 357 140 71% 54%

2008 48 687 000 70% 54%

Unemployment in SA

Unemployment in SA … (1)

JUL-SEPT 2010 25.3%

Unemployment in SA … (2)

Why higher no of females?

Unemployment in SA … (3)

Unemployment in South Africa (narrow definition) by gender and population group – March 2001 to March 2007 (Stats SA 2009)

Sex and population group Mar 2001

Mar 2002

Mar 2003

Mar 2004

Mar 2005

Mar 2006

Mar 2007

Male

Black African 29.4 31.4 32.8 29.4 26.7 25.8 25.0

Coloured 19.9 21.4 20.3 16.2 18.6 18.3 16.9

Indian/Asian 14.4 17.5 18.2 14.0 15.4 11.8 11.3

White 6.0 5.0 5.6 3.9 4.4 3.6 4.1

Average 24.6 26.1 27.2 23.9 22.4 21.6 21.1

Female

Black African 33.0 39.5 42.6 39.9 37.6 36.2 36.4

Coloured 22.8 27.2 24.7 20.2 21.2 19.6 22.9

Indian/Asian 20.5 24.0 28.7 21.0 22.6 10.2 17.9

White 8.2 8.6 7.7 6.3 5.9 6.2 4.6

Average 28.6 33.9 35.9 32.9 31.4 30.3 30.8

Unemployment rate (narrow definition) by age, percentage (2002 – 2010) [very high rate of youth unemployment in SA]

Youth unemployment: the key issues

In SA unemployment is mostly experienced by youth. About two thirds of all unemployed are below the age of 35 NEETS (Not in Education, Employment and Training) Disaggregation of youth unemployment by race

Highest among African and Coloured youth Highest among young black women living outside of

urban areas The phenomenon of adults with no work experience and

without any income source Contribution to national revenue over the life span Young people are poorly prepared for further training and work.

Income distribution in SA

Income (including social grants) distribution in SA … (1)

Figure 1. Distribution of income across deciles

0.2 1.2 2.2 2.9 3.5 4.7 6.410.3

17.8

51

0

10

20

30

40

50

60

1 2 3 4 5 6 7 8 9 10

Per Capita Income Deciles

Sh

are

of

Inco

me

(%)

Income (including social grants) distribution in SA … (2)

Above Figure indicates that: 10% of the population and the bottom 90% of the population each

account for approximately 50% of household income reported in IES 2005/2006.

Decile 1 accounts for a mere 0,2% of total income Decile 2 accounts for 1,2% of total income Decile 3 accounts for 2,2% of total income The poorest 40% of the population accounts for less than 7% of total

household income The poorest 20% of the population accounts for less than 1,5% of

income. 70% of South Africans command only 21% of national income To Note! By August 2009 there were 13,5 million South Africans on

the social assistance programme receiving different social grants. Of these 9,1 million are children. This translates into 27% of South Africa’s population based on population of 49,32 million in mid-2009

Income (including social grants) distribution in SA … (3)

Income (including social grants) distribution in SA … (4)

Social grants in SA

January 2011 Total of 14.62 beneficiaries 8.04% (2.63 million) are Old Age Pensions 69.5% (10.16 million) are Child Support

Grants allocated budget of R89.368 billion in

2011/12 financial year

The Human Development Index

Calculating the HDI

The Human Development Index and policy lessons from other countries

South Africa’s current position on the Human Development Index

The race and geography of multi-dimensional poverty in SA … the legacy of the homeland system

The former homelands

Former homelands – multiple deprivation (income and material, employment, health, education and living environment deprivations)

Former homelands and multiple deprivation

KwaZulu Natal

Eastern Cape

North West

Dimensions of poverty in post-apartheid SA [1996 and 2001] ... (1)

Bhorat, Poswell and Naidoo Dwelling types Water Sanitation Energy types Refuse removal Private goods

Dimensions of poverty in post-apartheid SA ... (2)

‘To be poor is to be hungry, to lack shelter and clothing, to be sick and not cared for, to be illiterate and not schooled. But for poor people, living in poverty is more than this. Poor people are particularly vulnerable to adverse events outside their control. They are often treated badly by the institutions of state and society and excluded from voice and power in those institutions’.

Living in poverty and powerlessness.

Many other challenges … Example in education

Education - according to PIRLS (in 2006) and TIMSS (in 2003) South Africa ranked last overall for Grade 4 reading achievement from a set of 40 countries including Morocco, Indonesia and Iran. TIMSS ranked South Africa last for Grade 8 mathematics achievement from a set of 46 countries including African peers Ghana, Botswana and Morocco.

The South African Constitution: foundational values, socio-

economic rights and implications for social policy

The SA Constitution – Preamble

Heal the divisions of the past and establish a society based on democratic values, social justice and fundamental human rights;

Lay the foundations for a democratic and open society in which government is based on the will of the people and every citizen is equally protected by law;

Improve the quality of life of all citizens and free the potential of each person; and

Build a united and democratic South Africa able to take its rightful place as a sovereign state in the family of nations’.

Bill of Rights

‘Bill of Rights is a cornerstone of democracy in South Africa. It enshrines the rights of all people in our country and affirms the democratic values of human dignity, equality and freedom. The state must respect, protect, promote and fulfil the rights in the Bill of Rights’ and ‘the Bill of Rights applies to all law, and binds the legislature, the executive, the judiciary and all organs of state’

Socio-economic rights … (1)

On housing (section 26) ‘everyone has the right to have access to adequate

housing. The state must take reasonable legislative and other measures, within its available resources, to achieve the progressive realisation of this right

’On health care, food, water and social security (Section 27) ‘everyone has the right to have access to health care

services, including reproductive health care, sufficient food and water, and social security, including, if they are unable to support themselves and their dependants, appropriate social assistance’.

Socio-economic rights … (2)

On children (Section 28) ‘every child has the right to basic nutrition, shelter,

basic health care services and social services’.

On education (Section 29) ‘everyone has the right to a basic education,

including adult basic education, and to further education’.

Policy responses from the state … an overview

Macro-level policy responses: From RDP to GEAR to ASGISA to Polokwane 2007

Sector level and Department level policies – human settlements, free education, social grants, EPWP, learnerships, IPAP, youth wage subsidy, SMMEs, primary health care, free basic services, etc

Creating joined up government – cluster system now delivery forums and outcomes cluster

Job creation and tackling unemployment (decent jobs) vs addressing poverty through quality ECD, education, health and skills

Social policy and economic policy

Social policy and economic policy ... (1)

There is a link and connection between the ‘social’ and the ‘economic’

There exists a dynamic interplay between how a country’s economy develops and grows, and how planning and investment in human capital through policies and programmes in areas such as education, health and social protection is carried out

Simply put, the wealth of a nation is its people.

Social policy and economic policy ... (2)

In South Africa the structure of the economy, the distribution of income, levels of unemployment, the concentration of poverty in some social groups and geographic areas, the high numbers of African women who are beneficiaries of the country’s social assistance programme, are all outcomes of and reflect the legacy of past economic and social policies

The nature of social problems is such that policies and developments in the economic sphere (high levels of long term unemployment, irregular, low wage casual labour without work related benefits) will have consequences in the social sphere (chronic poverty, food insecurity, child malnutrition, poor health, etc).

Social policy and economic policy ... (3)

At the centre of integrated human and social development is a socio-economic system that concerns itself with quality early childhood development outcomes as a foundation for successful life-long development, quality education at all stages and levels, quality health care, successful school-to-work transition as youth enters the world of work and the economy, as educated, skilled and healthy workforce and entrepreneurs, the provision of benefits throughout working life such as maternity leave, sick leave, training on the job, provision for retirement and other aspects. Crucially, part of investment in people and bringing about integrated human, social and economic development requires the provision of comprehensive social security to cater for instances when individuals or families are unable to support themselves because of failures in the labour market.

Social policy and economic policy ... (4)

Economic policies which shape the management of resources, the organisation of work and production, and the exchange and distribution of goods and services, are not a separate policy domain, but an integral aspect of social policies. Economic policies are, however, frequently separated conceptually from social policies. Such a separation leads to a view of economic activities as disassociated from human needs, social values, and social purpose. Moreover, the separation inhibits development of effective social power and social relations. Finally the separation reduces social policies conceptually to a residual function, focused mainly on victims of economic policy. Many social scientists and journalists tend to accept this conceptual separation, although it lacks a sound theoretical rationale