Table 7: Median and average monthly per capita incomes of households, by household structure Data source: Living Conditions Survey 2015
COVID-19 has worsened the economic situation and will affect poverty and inequality. Given the pre-pandemic South African context of weak, non-inclusive economic growth and high unemployment rates, it is expected that the economic effects of COVID-19 may perpetuate existing income inequalities and poverty. In some cases, it may even reverse economic gains made amongst vulnerable groups over the past two decades (e.g., women, the previously disadvantaged). Recent studies already point in this direction. Findings from the nationally representative NIDS-CRAMc survey provide robust evidence of sharp increases in household and child hunger and insufficient money for food during the COVID-19 pandemic, both of which remained disturbingly high from May 2020 to May 2021.14 When considering the impact of the COVID-19 crisis on the labour market - the source of labour income - gendered effects are already emerging. By March 2021, men’s employment and working hours reverted to pre-COVID levels but in contrast, women’s were below February 2020 baseline figures. Furthermore, inequalities in the time spent on childcare and in the income support for unemployed or furloughed workers endured during COVID-19.15 When Statistics South Africa upper-bound poverty line is used, more than one out every two South Africans were poor in 2015.16 While there had been a clear decrease in poverty (using the upper-bound poverty line) between 2006 and 2011 from 66.6% to 53.2% of the population, by 2015 poverty had increased to 55.5% of the population.16 This meant that 30.4 million South African were living in poverty in 2015. A similar poverty trends report has not been produced by Statistics South African since 2017 but the impact of COVID-19 is likely to have exacerbated the poverty situation by a large quantum.
5.2 Inequality in sources of income Since the end of apartheid, a divergence between the top and bottom income deciles in real factor incomes (income generated through labour, capital, land or entrepreneurship) was seen.17 The 13% increase in national income was largely due to a 30% increase among the highest decile, with an almost 50% increase seen in the top 1%.17,18 In contrast, the average factor income has remained static in the middle 40% group, while the lower 50% has had a 30% drop.17,18 Economic growth since the 2000s has primarily resulted in an increase in income among the high-income earners.17,18 Increases among the lower 90% have failed to rise substantially, and returned to levels observed in 1993 during 2011 (on the back of the global financial crisis). However, the top 10% was largely unaffected during 2011.17,18 Labour market income and large variation in labour market income play a very significant role in overall inequality. Work done by Stats SA and the French Development Agency found that roughly two-thirds of total inequality derives from inequality in labour market earnings and that half of this is related to the very high levels of unemployment in South Africa. Africa The distribution of wage earnings among the employed also shows a long upper tail which increases overall inequality.e c
National Income Dynamics Study (NIDS) – Coronavirus Rapid Mobile Survey (CRAM)
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TRENDS IN MULTIDIMENSIONAL INEQUALITY AND SOCIO-DEMOGRAPHIC CHANGE IN SOUTH AFRICA DURING 27 YEARS OF DEMOCRACY
