South Africa's 'freedom journey' stalled by poverty, unemployment and inequality

By Dale T. McKinley

January 13, 2015 – South African Civil Society Information Service, posted at Links International Journal of Socialist Renewal with permission – Evidently, the ruling African National Congress (ANC) thinks that the people of South Africa do not know their own history.

That’s more or less what ANC general secretary Gwede Mantashe said the other day when addressing the media in the lead-up to the organisation’s 103rd anniversary celebrations. In his words: “We will be reminding people of their history. They don’t know the journey and the complexity of the journey. Freedom is not a destination. It is a journey.”

Besides their astoundingly arrogant and patronising nature, such utterances surface a much more profound blind spot in the ANC’s understanding and appreciation of the historical and present freedom journey of the South African people.

While freedom is indeed not a destination, its journey is not reducible to the historic and contemporary macro politics, practical struggles and governance challenges of any particular party or movement. South Africa’s freedom journey is neither fully represented nor owned by, the ANC.

More crucially, while the journey certainly has myriad complexities there surely can be no sustained forward movement if the traveller does not have the necessary basics required to traverse the journey’s terrain.

Therein lays the fundamental problem. As South Africa enters its third decade of post-apartheid democracy, many of the core elements of the freedom journey for the majority of its people has at best stalled, at worst gone backwards.

No one, not least those whose freedom journey stomachs are so full they can’t even see the path in front of them anymore, needs to remind that majority of their own historical journey.

What we all need to be reminded of though, are the contemporary empirical realities, umbilically linked to history as they are, of South Africa’s cumulative journey towards socioeconomic justice and equality. Unfortunately, they make for extremely sobering reading.

Poverty and unemployment

• Extreme poverty - which is defined by StatsSA as a household of five living on less than R11 a day - has now reached 20% of the population. Moderate poverty - incredulously set at R22 a day for a household of five - encompasses just over 40% of the population. The vast majority in both categories are black South Africans.

• The Human Development Index (HDI - which measures overall quality of life) ranking of South Africa is 121 out of 187 countries/territories surveyed by the United Nations Development Programme.

• The average life expectancy of South Africans dropped from 59.9 years in 1995 to 49.5 years in 2012. When broken down by race the average life expectancy of blacks stands at 45.2 years as against 74.1 years for whites.

• The annual per-capita expenditure on health in the private sector is around R15,000 while the figure for the public sector is one 10th of that, coming in at around R1500.

• Out of a working population in 2014 of 35.5 million (aged between 15 and 64) just 20.3 million form the labour force. Of this labour force, only 15.1 million are actually working on a regular basis, either in the formal or informal sector.

• Only 36% of all black people who are of working age are employed compared to 63.8% of whites.

• Around 30% of all those employed are working in temporary, part-time and contract positions.

• Of unemployed black people, 67% are in long-term unemployment, while the figure for unemployed whites is 50%.

• Over two-thirds (67%) of youth – classified as between 18-24 years of age – have been unemployed for a year or longer, while that same youth cohort account for 90% of those who are unemployed and have never worked before.

• Less than a quarter (25%) of working-age adults living in the former bantustans are formally employed.

Wages and income

• The overall share of wages as a percentage of gross domestic product (GDP) declined from 57% in 1994 to 50% in 2012. For those working in the private sector the wage share dropped from 48% to 42%.

• Presently, the median minimum wage for workers in South Africa’s core industrial and manufacturing sectors is around R2700 per month. Meanwhile, the median wage for executives at 80 Johannesburg Stock Exchange-listed corporates hovers around R485,000 per month. For the CEOs, it is a whopping R760,000 per month.

• The overall share of revenue (inclusive of wages) accruing to workers in the platinum mining industry has declined by over 50% in the last 15 years.

• A platinum miner would need to work for 93 years just to earn the average mining CEO’s annual bonus.

• The average income of white South Africans is around 800% higher than the average income of blacks, while the greatest increases in income disparity since 1994 have come from within the black population.

• Households headed by women earn less than 50% of households headed by men.

Wealth and profit

• The profit rate (which is defined as the total net operating surplus relative to total capital stock) for corporate capital in South Africa almost doubled between 1994 and 2011.

• In the construction industry during the period 2000-2011, profits were 8 times greater than the amount of investments made by the industry.

• Over a period of 17 years (from 1994-2012), the market value of companies listed on the Johannesburg Stock Exchange (JSE) increased by 165% to stand at an astounding 300% of South Africa’s GDP.

• Just over 10% of South African households account for around 90% of all credit, most all of which is for houses and cars.

• In 2013, the aggregate wealth in South Africa was estimated to be about R6.5 trillion. 75% of this wealth was held by the top 10% of the population while only 2.5% was held by the bottom 50% of the population. Over 70% of the aggregate wealth was in financial assets.

• As of 2014, the two richest people in South Africa have the same wealth as the bottom half of the population. No doubt, the ANC has quite a bit to celebrate as it marks its 103-year-long freedom journey. It remains, by some margin, the largest and most powerful political party despite recent internal fracturing and increased electoral opposition.

Even if on ever-shakier foundations, it is able to use its "liberation movement" pedigree to reinforce historic loyalties and networks both internally and internationally.

Its firm hold on the state also continues to provide the organisation with unmatched institutional, social and political power. The ANC has used this power to become the main political custodian, however contested, of post-apartheid deracialisation and service delivery as well as ever-increasing avenues for self-reinforcing patronage, enrichment and class formation.

The harsh reality is however, that the ANC’s own celebrated freedom journey has produced and incubated levels of poverty, unemployment and inequality that are fatally undermining the much more important and central freedom journey; that of the majority of South Africa’s people.

Note: The figures presented here are largely taken from the South African government’s own statistical agency, StatsSA. Other key sources include the presidency’s 2014 Twenty Year Review, Oxfam’s 2014 Even It Up report on global inequality and work by economist Dick Forslund.

[Dale McKinley is an independent writer, researcher and lecturer as well as political activist.]