Effects of Income Inequality in South Africa
Income inequality refers to uneven distribution of household or individual income among various economic participants. It is a measure of the amount of wealth the rich controls against what those in the lower class control. In this article, we shall draw our attention on the effects of income inequality in South Africa, one of the countries with a high level of income disparity in the world. High levels of income inequalities always result into increased crime, emergence of oligarchic business structures and government distrust. Inequality further leads to limited economic upward mobility since children from poor families do menial jobs instead of going to school.
Effects of income inequality in South Africa after Apartheid
South Africa offers a striking example of a country with extreme levels of income inequality on earth today. South Africa has travelled fascinating road towards economic inclusivity. With the rise of social policy that was widely known as apartheid, SA suffered economically as the world cut links with it in the 80s, mounting pressure on the government of the day to end segregation laws that undermined black majorities.
While South Africa is considered developed, according to the international trade statistics, the United Nations still holds that SA is a developing region owing to low life expectancy and high levels of income inequalities. This position by the UN creates good basis for the understanding of the effects of income inequality in South Africa. As measured by the GINI index, SA’s income inequality stands at 63.1%, which is still the highest figure according to the World Bank. Importantly, income inequality in South Africa is not monetary value. The issues of race remains at the epicenter of the disparities that threaten Africa’s most developed nation.
Income inequality and SA’s Poor Outlook
Income inequality continues to affect South Africa in various ways. For example, it is a major contributor of massive unemployment in the country. While the unemployment rate stands at 25.6%, The Economist argues the rate among blacks could be about 55%, denoting a major socio-economic challenge. It is therefore evident that SA suffers from rampant unequal unemployment between blacks and whites. This creates division between the haves and have-nots who cannot meet their needs and the needs of their households. Despite political efforts to bride this gap, it appears to grow every day because of global economic issues like recession and unforeseen reactions to the reforms.
The effects of income inequality in South Africa have had a toll on the country for a long time, since the issues have a long history spanning from 1600s to 1990s when the government outlawed apartheid and embraced equality and inclusivity of every citizen. It is undeniable that the social policy that existed for more than 50 years in South Africa, largely contributed to the problems the country experiences today, including income inequality based on race and color.
The real effects of income inequality in South Africa
As mentioned before, many problems that SA faces today stem from historical injustices perpetuated during the apartheid rule that ended in 1990s. Because of income inequality, South Africans have become poorer year in year out. According to the National Poverty line of $43 monthly, more than 47% of South Africans live in poverty. The number of people living below a dollar a day has continued to rise since 1994 when the figure stood at 2 million. However, there is huge disparity between blacks and whites as the former seem to be stuck at the center of this national scourge reaping through the nation.
Importantly, the effects of income inequality in South Africa have largely hampered economic development and socio-economic stability. For example, frequent labor actions in South Africa and Xenophobic attacks have been tied to such disparities. Additionally, the government finds it difficult to improve basic amenities like healthcare and education because of these levels of uneven distribution of income among households.
Besides poverty, high-income inequality leads to high rates of crime in South Africa. According to a 2011 survey, South Africa emerged eighth on the list of countries with highest rates of homicide. This research, which tallied 98 countries in the world, shows how the country’s inequality breeds other social ills.
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