We’re all feeling a little financially strained at the moment.
Here’s the thing, though – before the economy took a dive, South Africa was already facing massive wealth inequality.
This is confirmed in a study conducted by researchers Aroop Chatterjee, Léo Czajka, and Amory Gethin, presented recently at the University of Cape Town, measuring the distribution of household wealth in South Africa.
According to IOL, not much has improved since we achieved democracy 26 years ago.
Chatterjee, Czajka, and Gethin’s approach allows wealth inequality in South Africa to be reasonably compared to other countries through the World Inequality Database. This tracks inequality measures, including wealth, using standardised methods across a growing number of countries.
South Africa has by far the most unequal distribution of wealth, with the USA a distant second. Chatterjee, Czajka, and Gethin conclude that “available data unanimously points to South Africa being one of the most unequal countries in the world, and even more so when looking at wealth rather than income.”
The study breaks down the distribution of wealth like this:
Due to debt, the bottom 50% (17,7 million people) have an average negative net wealth of -R16 000.
Let that sink in – a massive 15% of the entire country’s wealth is controlled by only 3540 people, while the 1% control well over half of total wealth in South Africa.
Inequality of wealth, in contrast to inequality of income, became the focus of economists partly as a response to Thomas Piketty’s Capital in the Twenty-First Century. This work described how the incomes of the top 1% of people in the world had been growing at a much higher rate than the bottom 99% since the 1980s.
The rich really are getting richer.
As for where you personally fit into this equation, it’s worth looking into the Southern Africa Labour and Development Research Unit’s calculation tool, which lets you punch in your monthly income, and then compares your pay to the rest of the country.
Spoiler – it doesn’t take much to crack the top 10% in South Africa.
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