IF YOU grew up in a large family (mine had five children), you know the wretched feeling that you came off second best compared to your sister.
It's not so much that your Christmas present or birthday party wasn't great - it's just that, in your mind at least, hers were better. Now scale that feeling up to reflect SA's far more real and much bigger economic inequalities, and you can grasp their effect on social cohesion.
In 2005-06, the national Income and Expenditure Survey found that the average income for the top 10% of households was 32 times that of the bottom 50%. The richest decile enjoyed well over half of all household income. Inequalities that steep bite like acid. They're rubbed in every day when you see luxury houses and huge cars, first-rate government services and posh malls in suburbs just kilometres from informal settlements where people live without decent sanitation, water or schooling.
International experience demonstrates that inequitable societies tend to run into traps of conflict and anger that prevent effective development. And apartheid left a particularly poisonous legacy, since economic inequalities align with race, gender and geography. That makes the divisions sharper and social solidarity even more elusive.
Inequality has several dimensions.
To start with, mass joblessness means many people have virtually no earned income. According to the International Labour Organisation, SA ranks among the 10 countries with the lowest share of employed adults in the world.
For the employed, pay is unjustifiably inequitable. In 2008, the Quarterly Labour Force Survey found that one in seven non- agricultural formal employees and two-thirds of domestic, informal and farm workers earned under R1000 a month. Three-quarters of security guards got less than R2500 a month - many risking their lives for people who earned an order of magnitude more.
Assets are even more unequal than pay.
In 2005-06, a household in the richest decile earned 94 times as much from investments as one in the poorest 60%. The richest 10% of households got three-quarters of all the income from capital, compared with less than 1% for the poorest 60%.
The difference is only a tad less stark if we look at income from all accumulated assets, including pensions and enterprise profits. The richest 10% of households got almost two-thirds of income from these assets, while the poorest 60% received 1%.
Social grants, support from relatives and remittances were strongly redistributive, but could not fully offset inequalities in assets and pay. Last year, nearly 4-million people got an old-age or disability pension at R1010 a month, while nearly 9-million got a R240 child-support grant.
These grants are too small to lift families out of poverty. But they are the main source of income for a quarter of all households, and almost two-fifths of those in the former Bantustans.
Finally, continued inequities in education and healthcare reproduce economic inequalities across generations.
The worst education and medical care is still found in the poorest communities, notably the former Bantustans - which still house 45% of all children under 15, though only a third of working-age people.
The results emerge in tertiary education. In theory, it should be a central mechanism for social mobility. In practice, inequalities in general education and income mean it still mostly reproduces inequality. Thus, in 2006, while Africans made up three-quarters of the population, they made up only 51% of university students, and a much smaller share of students in professional programmes.
Government policies to improve incomes, assets and services for the poor have been geared mostly to providing a safety net rather than enhancing overall equality. In particular, policies to increase the asset base of poor communities remain weak, and education and health policies tend to focus on improving average outcomes rather than targeting the systemic inequalities left by apartheid.
A strategy to ensure more equitable access to assets should take into account the many different kinds of capital that now exist: household savings, management and ownership of enterprises, shares in companies, family housing and access to infrastructure, and social capital in the form of publicly and collectively owned assets. The question is how the government can secure more equitable power in the economy while sustaining overall growth and investment.
A particular problem emerges in black economic empowerment (BEE). Broad-based BEE policies acknowledge the need for greater overall equity, including through collective ownership by workers and communities as well as skills development. But in practice, the government's strongest measures - notably the mining codes and parts of land reform - have focused almost exclusively on promoting individual ownership by black people. That does little to address broader economic disparities, though the rich may become more diverse.
Finally, the social and political effect of inequality has been aggravated by conspicuous consumption by the well-off in both public and private sectors. In contrast, in successful social democracies the rich play down their excesses. We need to encourage a similar culture of solidarity where elites understand the high social and political costs of flaunting their wealth.
- Makgetla is lead economist for research and information at the Development Bank of Southern Africa.