A - Dimensions of structural inequality

South Africa

Reclaiming Power:
Womxn’s Work and
Income Inequality in
South Africa
November 2020

Inequality Report 2020 1

 Abstract
CEO takes home as much as 461 black women from the bottom ten percent of earners. Labour market inequality is a key
driver to stubborn gender, race, income and wealth inequality in South Africa
Existing government policies have failed to reduce inequality because macroeconomic policies have entrenched rather
than reduced the dominance of a handful of conglomerates based in finance, extractives and energy. This skewed
industrial structure, established during apartheid, has led to a decline of manufacturing, jobless growth, asset price
inflation and investment volatility in the era of financialisation, while crowding out the informal sector’s ability to
absorb unemployment.
Addressing the crisis of inequality in South Africa therefore needs to go much further than the labour market reforms, skills
development policies and micro support for the informal sector that have been advocated by mainstream economists.
Long-term, socially sustainable distributions of income would require radical transformation of the economy towards
more labour intensive, linked to sectors that serve the needs of the population - for example via a developmental welfare
state across health, education and other social needs - rather than the imperatives of profit and capital expatriation.
Specific policies to reduce labour market inequality - such as a living wage, a maximum income cap no higher than 10%
of the income of the lowest paid worker in firm, social protection for all and making workplaces safe for women - must be
rooted in macroeconomic policy that reorients away from the ‘Minerals Energy Complex’ and expansion of the financial
sector in and of itself, towards industrial policy aimed at promoting sustainable and equitable economic development.

Inequality Report 2020 3

 CONTENTS

Page 3 Page 6 Page 8 Page 9

Contents Acknowledgements Foreword Glossary

Page 11 Page 12 Page 17 Page 23

Acronyms What is this What we do is Johann Rupert’s
report about? important too entrepreneurial secrets

4
Inequality Report 2020 Inequality Report 20204
Introduction
A B
Dimensions Women
of structural inequality at the margin
1. Social inequality 32 1. Unpaid care work 56
2. Income inequality and wealth inequality 39 2. Precarious work 60
3. Labour market inequality 45 3. Informal work 70

C D E
What is behind classist, gendered How the state’s microeconomic What could we do instead?
& racialised labour inequality in policy and practice maintains OZA’s recommendations
South Africa? the status quo?
1. What is the Minerals Energy Complex? 76 1. At work in the formalised sector 109 1. Policy recommendations for reducing labour
2. The Financialised Minerals and Energy Complex 80 2. At work in the informal sector 114 market inequality 135
3. The Historical Origins of the Financialised MEC 87 3. Industrial policy 116 2 .Build your own campaign 142
4. Economic Reform since 1994 94 4. Political and Corporate capture as a driver of inequality 120 3. How to use this report 144
5. Other Social Impacts of Financialised MEC 101 5. Taking the fight into the future 127

5
Inequality Report 2020 Inequality Report 20205
 ACKNOWLEDGEMENTS
This report is an outcome of a Nomonde (JITP); Paulos Selibana (JITP);
participatory research with Oxfam Project and Research Coordinator: Social Movement Reviewers: Ntakuseni Tshikosi (JITP); Lebogang
South Africa’s (OZA’s) social Pumza Vitshima (National African Phanyelo (South African Federation
Dr Basani Baloyi (Oxfam South Africa, OZA)
movements partners and academic of Trade Unions; SAFTU); Mosa Nkoko
Farmers Union); Micheal Mokgoja (South
researchers that spanned a two year (SAFTU); Bonisile B Malati (JITP); Othusitse
Africa Informal Trader Association,
process from the conceptualisation Editors: Jackals (SAITA); Gladys Thlame (Simunye
SAITA); Thozama Gwente (SAITA); Agnes
of the research to its development. Claire Cerruti, Dr Basani Baloyi (OZA). Workers Forum)
Motlhokoa (Tiyisetsang); Julekha Latib
(One Voice Of All Hawkers Association);
Dade Hlatshwayo (Johannesburg
Copy Editor:
Informal Traders Platform, JITP); Jane Reviewers:
Lorraine Shabangu (University of the
Nonyane (JITP); Zodumo Chitwayo Ms Sipokazi Mthathi (OZA), Rukia
Witwatersrand, Wits).
(JITP); Sibulele Poswayo (Inequality Cornelius (OZA), Asanda Ngoasheng
Movement); Zipho Xego (Transkei Land (OZA), Prof Ben Fine (School of Oriental
Researchers: and African Studies), Dr Gilad Isaacs
Service Organisation), Olwethu Kota
Ms Baba Tamanda Gqubule (Trade and (Wits University), Ms Caroline Skinner
(Unemployed Peoples Movement, UPM);
Industrial Strategies, TIPS), Dr Mondli (UCT), Mr Duma Gqubule, Max Lawson
Sinovuyo Ngubo (UPM); Salphy Nkoana
Hlatshwayo (UJ), Prof Chris Malikane (Oxfam International, OI), Cristina Rovira
(Matshupatsela Cooperative, MC); Ruth
(Wits), Prof Susan Newman (The Open Izquierdo (Oxfam Intermon), Prof. Mike
Mkari (Matshupatsela Cooperative);
University), Dr Ben Scully (Wits), and Mr Rogan (Makanda University), Dr Seeraj
Lulama Mali (JITP); Ruth Makari
Ryan Brunette, Nokwanda Maseko (TIPS). Mohamed, Mr David Francis (Southern
(MC); Ziwelile Florah Mnisi (Minenhle
Cooperative); Shereza Sibanda (Rivoningo Centre for Inequality Studies), Dr Kate
Research Assistance: Women’s Forum); Persely Msibi Philips (Government Technical Advisory
Ms Akona Zibonti (OZA), Ms Kwezilomso (Iketsetse); Lebogang Malewa(Young Centre), Dr Carin Rancin (UJ), Dr Malehoko
Mbandazayo (OZA), Ms Vuyokazi Futshane Nurses Indaba Trade Union, YNITU); Tshoaeli (UJ), Mthandazo Ndlovu (OZA), Mr
(OZA), Mr Sameer Dossani (Oxfam Great Catherine Modise (YNITU); Choaro Dibate Obi Gadziwa, Dr Chiara Mariotti (OGB); Mr
Britain, OGB), Dr Basani Baloyi (OZA) (YNITU); Kelebogile Mokabe (YNITU); Sameer Dossani (OGB).
Thomas Mathebula (YNITU); Patience

6 Inequality Report 2020

 Grassroots Social Media
Popular Education
Campaign

Roadshow INEQUALITY 1 year of

REPORT mobilising
SOUTH
AFRICA

State of the Political

nation address Influencing

DRAFT 2
Developmental phase 2: Once the reports
were final. we then produced a synthesised
version of the report, which had two rounds of
comments from social movement and reference
group. There was a further round of refinement
before it was sent to graphic design. We also
Informal Domestic Academics Care Oxfam Technical Labour Young
held a campaign design workshop to identify Workers Workers Workers People Unions People
campaign areas.
DRAFT 1

TIME AND ENERGY

Developmental phase: We then contracted Section A Section B Section C
researchers to produce the research Meeting 1 Meeting 2 Meeting 3
papers. and then then they were sent to
social movement reviewers as well as the
reference group for comments. there were two
workshops held with social movements to take
comments.

COLLECTIVE CONCEPT
Conceptualisation phase: We met with
social movements and academics to have
discussions which helped to develop a
proposal. That was turned into a set of
proposals.

Inequality Report 2020 7

 FOREWORD

SIPHOKAZI MTHATHI This report is one important step towards a better dynamics that make it unlikely to have what is written
OXFAM SOUTH AFRICA understanding of inequality and what we should do to about embody a full representation of the lived experience
EXECUTIVE DIRECTOR reduce it. I would humbly suggest that you take your time of the womxn and men impacted by inequality.
with it.
While to some extent these issues are inescapable, the
A lot is said about inequality in South Africa, but how Taking time may be a challenge, but it can be very first step to any solution is to be aware of the problem.
much is understood? When we hear time and again that rewarding. If you were to take your time to understand We at Oxfam South Africa are aware of the many problems
South Africa ranks among the most unequal countries in the South African story of inequality, you might find that regarding whose stories are told and how they are told.
the world, what does that mean to us? After hearing this a it is a story that is still being written. Its first act is set in We have done our best to ensure that this report reflects
few times, still, does it even register? Or make much of a the desperation and brutality of the colonial era, when the voices of those whose stories are often not included
difference in our lives? Europeans came here seeking wealth and saw different in the larger narrative around inequality. We have worked
There is a difference between information and knowledge. forms of slavery and coercion as a means to obtaining that closely with several social movements including feminist
Information is what we receive from the television or radio wealth. The second act takes place as black people resist movements, youth movements, unemployed people’s
news, or from our phones which ping us with information that oppression, even while the oppression entrenches movements, labour unions, LGBTQ+ movements, and
from social media feeds that may or may not even be itself through the formalizing of the apartheid system. movements of people who work in the informal sector. They
accurate. In order to turn that information into knowledge The third act, which is where we are now, begins with the tell their own stories through these pages, stories that
we need time. That is, time to verify whether or not the promises of a constitution that offered hope of a new kind have too often been overlooked by those who would claim
information is accurate or useful. Time to process that of radical egalitarianism. So far, that egalitarianism has not sole authorship of the South African inequality story. We
information, and then incorporate it into our view of how materialized. There have been some successes, however at Oxfam South Africa are aware of our own role in claiming
the world works; and time to determine what course of – access to medicines and HIV/AIDS campaigns count as such ownership, and so we recommit ourselves to enabling
action, if any, is required. at least partial success – but elite capture, in the form of individuals and communities to write their own stories. I
state and big business, seems to be a more powerful trend leave the question of whether we have succeeded in this
Insofar as inequality is concerned, have we been able to than anything like an equitable redistribution of resources. endeavour to you, dear reader.
turn the information that South Africa is one of the world’s Whether we will accept that elite capture will be the end
most unequal countries into knowledge about what that Ending the cycle of depravation and inequality in South
of the South African inequality story is a decision for all of
means and what we should do about it? When I consider Africa is a challenge for all of us. All of our stories are
us to make.
the brutality that some forms of inequality can take – a important; all of our voices deserve to be heard; and we
black woman being so much more likely to be killed by her With such being the story’s content, who are its authors? are more likely to be heard when we speak together as
partner, to take one example – I must conclude that we Usually reports are written by experts, meaning people who one. To make your voice heard, consider getting involved
have not. Information has remained information buzzing themselves come from an elite background, who may have in the campaigns that will be unfolding around inequality
around on our phones and maybe even in our brains. But professional degrees, and who often write without even over the next few months and years. As a first step, please
we as a society have not yet fully processed it and taken visiting the communities about whom they are writing. go to the website oxfam.org.za/campaigns for a list of
steps towards a better future. If they do visit, their visit is often wrapped up in power actions that you can take today.

8 Inequality Report 2020

 glossary
A-L Austerity: limiting or cutting overall
government spending especially on
Feminisation of migration: the tendency
for more womxn to leave their countries
Heterosexual: a person that is only
sexually attracted to and has sexual
social services. to look for work elsewhere. relations with a person of the opposite
sex.
Feminisation of work: when more womxn
enter the work space.
Caste system: one’s social status is Income inequality: how much more a
determined at birth. Financialisation: ways in which finance certain group or individual makes in
has become more and more powerful in income than another group or individual.
Cisgender: when a person self identifies
shaping the economy and our lives.
in manner determined by their birth sex. Intergenerational class mobility: the
Free markets: markets that are not ability of a family to improve their social
Cis-normative: the assumption that all
regulated by any government law or class or material conditions.
people have a sexual orientation that is
government norms and standards.
given by their biological sex. Intermediate outputs/inputs: goods or
services produced to be used in further
Collusion: rival companies agree to keep
Gender non-conforming persons: when production, such as raw gold or energy.
prices up.
a person’s appearance or behaviour is Intersecting inequality: when an
Conglomerate: a large company different from the dominant cultural individual or group has a unique
composed of a number of and social expectations about what is experience of inequality when different
other companies. appropriate to that gender. forms of inequality such as race, gender,
Greenhouse gas: gasses that trap the class and space mix together.
Deindustrialisation: a fall in the number heat from the sun above the earth’s
of jobs in the manufacturing sector. surface so that the earth becomes Labour market inequality: when a group
warmer than usual. or individual earns more from the work
Economic inequality: income and they do than another group or individual
wealth inequality. Hetero-patriarchal: a social and political because of the way in which the labour
system where cisgender males exercise market values the work that is done.
Economic marginalisation: being
authority and control over cisgender Land reform: policy, law and
excluded from participating in
women and people of other sexual regulatory changes that are made to
the economy.
orientations and identities. land ownership.

Inequality Report 2020 9

M-W Mashonisa Economy: Mashonisa is Zulu
for loan shark. Mashonisa economy is
Privatisation: when the government sells
many of its assets often for a fraction of
a nickname for financialisation that we their real value.
have given to describe our economy.
Median income: the amount of income Social inequality: differences in unequal
that divides the income brackets into access to services.
two equal groups. There are those
groups that will have more income than
Trade liberalisation: when
that amount, and another group that has
the government cannot prop
income below that amount.
up its businesses against
international competitors.
Non-binary persons: people who do
not consider themselves to be men or Wealth inequality: how much more a
women. certain group or individual makes in
income than another group or individual
Non-core businesses: activities and/
and how much more a certain group or
or businesses that generate the least
individual owns in assets than another
money in a business.
group or individual.

Own-account workers: people who work

for themselves, not for someone else.

Patriarchy: a system of oppression that

enforces male dominance over womxn
and non-binary people.
Patronage: the power of some to give
another a job, favours or privileges in
exchange for political support.

10 Inequality Report 2020

Acronyms
ANC: African National Congress FPIC: Free Prior and Informed Consent SADSAWU: Service and Allied Workers
BEE: Black Economic Empowerment Union
GEAR: Growth, Employment
B-BBEE: Broad-Based Black Economic SAFTU: South African Federation of Trade
IDC: Industrial Development Corporation
Empowerment Unions
ILO: International Labour Organisations
BCEA: Basic Conditions of Employment SA-TIED: Southern Africa Towards
IPILRA: Interim Protection of Informal Inclusive Economic Development
Act
Land Rights Act
BIS: Black Industrialists Scheme SERI: Socio-Economic Rights Institute
LRA: Labour Relations Act
CEO: Chief Operating Officer SOEs: State Owned Enterprises
MEC: Minerals Energy Complex
COSATU: Congress of South African Trade TEM: Transworld Energy and Minerals
MIDP: Motor Industry Development Resources
Unions
Program
CWAO: Casual Workers’ Advice Office TLGFA: Traditional Leadership and
MRC: Minerals Resources Commodities Governance Framework Act
DCCS: Duty Credit Certificate Scheme
NUMSA: National Union of Metalworkers of UIF: Unemployment Insurance Fund
DEMAWUSA: Democratic Municipal and South Africa
Allied Workers’ Union of South Africa UNDP: United Nations Development
OZA: Oxfam South Africa Programme
EPWP: Expanded Public Works
PIT: Personal Income Tax VAT: Value Added Tax
Programme

Inequality Report 2020 11

What is this report
about? “Executive”
Summary
Inequality in South Africa is out of control. It would take of 10 people once they enter the labour market are determined by what
their parents earned. Therefore, despite what we hear about free markets
the pay of 461 black womxn from the bottom 10% of and individual choice, the structure of South African wealth and income
earners to make as much as the average (white, male) inequality looks more like a caste system, where one’s social status is
CEO takes home in a year. It just takes 23 hours for the determined at birth and is based on race, class and gender than a system
of free association among people of equal value.
average CEO to earn what the average worker earns in a
year. Moreover, according to the World Bank, the richest Labour market inequalities are one of the key drivers of wealth and income
inequality in South Africa. Wage inequality accounts for between 80% and
20% of people in South Africa control almost 70% of the 90% of overall inequality. The labour market determines who does or does
resources.1 not get a job, who earns more or less for the work they do, what kind of
Wealth is also highly concentrated. According to numbers derived from work is or is not paid for, and in which kind of work labour rights will or will
Credit Suisse’s “Global Wealth Report”, nearly 7 out of every 10 South not be respected.
Africans (nearly all black and disproportionately female) own wealth less The position of black womxn remains a vivid and important measure of
than R117,0002. However, there are a few South Africans who have a lot of labour market inequality and resulting social inequality in South Africa.
assets. 10% of South Africans own 90% of the wealth; meaning that the The report focuses on three segments of the labour market - unpaid care
remaining 90% of the population only has 10% of the wealth. work, precarious work and informal work - that are the worst affected by
Sadly, most people’s income and wealth levels in South Africa are labour market inequalities.
determined at birth. If you do not have the right start in life, shelter, We face these inequalities because of a sexist, classist and racist
quality healthcare and education, educated parents with good paying economic system that only serves the elite few. As such, these inequalities
jobs, then you are most likely to live a life of poverty. The earnings of 9 out

1
Source: http://povertydata.worldbank.org/poverty/country/ZAF [you can change this to any stat you want]
2
Markus Korhonen. 2018. ‘FACTSHEET: Wealth in South Africa’. Africa Check. 22 March 2018. https://africacheck.org/factsheets/factsheet-wealth-south-africa/.

12 Inequality Report 2020

 are deeply rooted in our colonial history, and are a product of a broken, Privatization (when the government has to sell many of its assets often
neoliberal economic path, elite capture, and a focus on male dominated for a fraction of their real value) has not only led to corporate capture
mining, energy and related industries, including finance, that benefit the of state assets but it has taken away some of the tools such as State
very rich. The needs of the ‘minerals-energy complex’ (MEC) have shaped Owned Enterprises (SOEs) that could be used to create more and better
the whole economy towards perpetuating and intensifying jobless jobs. Conservative monetary policy (policy targets low inflation rather
growth and economic and gender inequality. The MEC is skewed towards than job creation) has led to a fixation on the value of the Rand by the rich
employing machines (i.e. capital intensive) rather than employing low to to maintain their wealth.
semi-skilled people (labour intensive). The growth of “financialisation”
Austerity (limiting overall government spending especially on social
– which a participant in a workshop nicknamed the Big Mashonisa
services) has meant that the government cannot invest in developing
economy – has made this much worse because it focuses on hot money
social protections or adequately invest in job creation. Cuts to public
or short term money flows that seek to make quick profits from short term
service spending hurt womxn the most because they carry the burden of a
investments for the rich without job creation. The structure of the MEC
shrinking public service sector through their unpaid labour which affects
was inherited from apartheid, but it has conditioned the way in which
their ability to participate in the economy and traps them in a life of poverty.
economic restructuring has occurred since 1994.
Collectively these policies have failed even by their own logic because
High levels of economic and gender inequality which features the continued they were meant to generate high growth rates and South Africa’s growth
dominance of the MEC, under investment in productive activities and high has been low in recent years and unemployment ever rising.
unemployment are largely due to government policy choices.
Failing to protect workers
Macroeconomic Policy Framework that does not support
The exposure of our economy to global markets means that firms have to
employment creation and contributes to crisis of care compete viciously for a share in the market. Shareholders and manager
With the end of apartheid in the 1990s, the South African government of companies have retrenched workers and used unfair labour practices
embraced “Washington Consensus” policies. These included trade while doing so in order to sustain high profits. The big job losses of past
liberalization, privatization and budget austerity. These policies have years have increasingly feminised the workforce, but has not improved
proven to be a disaster for most people because they have strengthened womxn’s conditions. Casualised and outsourced workers tend to earn less
the MEC putting South Africa in a low growth, low investment, and low than permanent workers. They are less able to organise to protect their
employment. Trade liberalization, which is when the government cannot rights because employers can fire them simply by refusing to renew fixed-
prop up South African businesses against international competitors, has term contracts or by denying them shifts. A little more than one in ten
undermined the growth of South African manufacturing and job creation. workers were precarious in 2014 in South Africa, and the number doubled
This reinforced South Africa’s extractive mineral based economy which to more than two in ten workers by2017. Womxn are worst affected by this:
does not create jobs. globally, eight out of ten womxn in work are precarious workers. The use

Inequality Report 2020 13

of these mechanisms to circumvent labour laws has allowed the wage and officials regularly draw parallels amongst immigrants, illegality, and
gap and gender wage gap (the latter is 40%) to widen. This is made worse disorder, which affect South African and immigrant traders alike.
by the fact that the government has not capacitated itself to adequately
enforce basic protections for these workers or for permanent workers. Failing to support small and womxn’s businesses
Compulsory secret balloting, conciliation, picketing rules and compulsory
Industrial policy is skewed towards industries where the labour force
arbitration all work to “decrease the heat” and limit workers’ right to strike.
is dominated by men and funding specifically for womxn-empowered
The minimum wage, which has been set at a low R20 an hour, should be businesses is limited. Thus, the state has failed to recognise that
a protection for workers who have the most difficulty organising, but it overcoming womxn’s economic marginalisation requires intentional
excludes some of the lowest paid workers – domestic workers, farmworkers targeting, similar to the work of the Black Industrialists Scheme (BIS)
and workers in the Extended Public Works Programmes. Also, employers which aimed to address the lack of black industrialists in the country.
may apply for even that minimum to be waived on the basis of ‘financial
Competition policy currently focuses on the enforcement of rules against
hardship’, ensuring that workers carry all the risks of a volatile economy.
collusion (when rival companies agree to keep prices up) and excessive
pricing; but competition laws and policies should be used to open up
Suppressing the informal sector
markets to include more participants.
Another factor contributing to high levels of unemployment is the relatively
low level of participation in the informal sector. In most low- and middle- Political and corporate capture of the state
income countries it is normal for a very large portion of workers to work
Even if policies are well designed for dignified work, political and
in the informal sector and for relatively few to be openly unemployed.
corporate capture of the state results in their failure. Schemes that were
However, South Africa’s informal sector is smaller relative to other
designed by the ANC in the early post-apartheid period to empower black
comparative countries. Since the global financial crisis, the presence of
workers and black-owned businesses in less populated and remote areas
womxn in the sector has declined. Government has made a concerted
have been expanded and misused to create private fiefdoms that often
effort to promote the informal sector as a way to address poverty and
involve a nexus of politicians, civil servants, and local contractors and
unemployment, but the dominance of the conglomerates over the
subcontractors. The result is a state where political and corporate capture
economy and increased harassment and repression at a local level are a
has been institutionalized.
major source of the challenges to the sector. These legal and extra-legal
restrictions have strong negative effects on traders’ livelihoods, especially
Climate Change
womxn’s livelihoods, because of lack of safety. Both the spectacular
and the everyday forms of harassment reflect a pervasive anti-foreigner Because of the role of the MEC as both a huge consumer of power and a
sentiment, which reinforces a generally punitive approach to the informal producer of coal to run coal-fired power plants, South Africa is one of the
sector that focuses on regulation and control. The rhetoric of policy world’s largest per capita emitters of greenhouse gas. But not everyone

14 Inequality Report 2020

 01
is to blame – about 30% of South Africans are not even connected to the A living wage and a cap on maximum income - Better enforce
power grid. The biggest consumer of power by a considerable margin is Section 27 of the Employment Equity Act which is meant to
the MEC itself, consuming more than twice the amount of power used by guarantee a measure of equity between the highest paid
all South African residents combined. and the lowest paid employee in any given firm, which also
includes contract workers. No CEO should make more than
Land 20 times what is paid to their lowest paid employee in terms
of cash and other forms of CEO compensation (company
The privatization of land for use by the MEC can be understood as the vehicles, share options, etc.). Sectors that have a lower
colonial-era foundation of South African inequality. Post 1994, land minimum wage in comparison to the national minimum
reform policies were put in place that were meant to reverse this trend wage such as Expanded Public Works Programme (EPWP)
and allocate land to black South African womxn and men. Unfortunately, workers, domestic workers and farm workers must also be
these policies have been largely unsuccessful. When mining companies in alignment with the national minimum wage level.
want land, they have been able to obtain it without respecting the relevant
provisions in South African law – including the need to ensure that people

02
selling their land do so with Free Prior and Informed Consent (FPIC). A new Implement a package of progressive macroeconomic policies
economic model that embodies the qualities of a Peoples Economy is – monetary policy must target full employment. Controls
required for South Africa that will consistently reduce the gap between should be put in place to limit harmful hot money activities,
rich and poor. OZA has developed its own recommendations from this and investors should be encouraged to invest in productive
research, but people can use the report to develop their own demands (not speculative) economic activities, prescribed assets
and recommendations independently. must be used for job creating long term investments.
Addressing the crisis of inequality in South Africa therefore needs

03
to go much further than the labour market reforms, and skills Fiscal Tax Justice – Re-establishing progressive direct and
development policies advocated by mainstream economists. Long- indirect taxes for PIT and VAT, the taxation of accumulated
term, socially sustainable distributions of income would require radical wealth, remove tax breaks for medical aid and pensions,
transformation of the economy towards more job creating, linked tackle non-compliance, tax evasion and tax avoidance.
sectors that serve the needs of the population - for example via a
developmental welfare state across health, education and other social

04
needs - rather than the imperatives of profit and capital expatriation. Tackling Political and Corporate Capture – professionalising
the civil service so that it is not undermined by political
Specific policies to reduce labour market inequality – and corporate capture.

Inequality Report 2020 15

05 09
Gender Accountable and Just Budgeting and Planning – Reverse labour reforms that attack working class organising
gender accountable and just budgeting to be legislated – Scrap the Secret Balloting, Extensions of Conciliation,
as part of government’s budgeting responsibility which Advisory Arbitration and Picketing Rules provisions in the
makes provision for the participation of broader civic Amended Labour Bills. The 2019 Labour Bills seem to be
movement including womxn and youth groups. a step in the wrong direction in terms of ensuring that
working people in South Africa have a right to organize

06
themselves into strong unions.
Recognise, reduce, redistribute unpaid work and care workers
to be represented in policy decision making – access to

10
quality universal public services are critical to relieve
Protections, Fair safe access to markets for informal sector
womxn of unpaid care work.
– As per the ILO Recommendation 204, informal traders
should be free from harassment by police and other

07
officials, have access to places where their goods can be
Implement industrial policies that prioritize the creation
traded and have access to social protections, similar to
of more and better jobs for womxn – Womxn – especially
those of formal workers (UIF, parental leave).
young black womxn – are under-represented in the South
African labour market. By prioritizing policies that will

11
create more and better jobs for womxn, governments can
both decrease disparities between womxn and men and Universal Basic Income Grant – Expanding social protection
increase the level of development overall. through, for example, provision of a Universal Basic Income
would go a long way towards alleviating the insecurity that
many people in South Africa face.

08
Enforce labour protections for democratic and fair
workspaces – Though anti-racist and anti-sexist laws
exist with regard to workplace protection, these laws are
rarely adequately enforced or even understood.

16 Inequality Report 2020

 What we do is The farm was near eMnambithi. That is where my grandmother and
grandfather had their house. My grandparents were the ones who raised

important too
me. My mother gave birth to me in Johannesburg, and she brought me
to my grandparents on the farm. My mother was a domestic worker in
Johannesburg at the time. I had two uncles who used to come to work on
the farms interchangeably during the six-month contract periods. One of
my uncles, the youngest one, got into a conflict with the white man who
Does the CEO deserve 149 times the income of the owned the farm and was beat up by the white farmer.
average black womxn? Inequality is sometimes said to White people used to make you do what they want when you lived on their
result from different abilities: the belief is that the rich property. They would beat you up and make you do whatever they wanted.
are being rewarded for taking risks, having superior My younger uncle had very little patience. This incident ended up getting
my uncle fired and my grandmother getting kicked off the farm. [XREF TO
skills, hard work and an unusual determination. STRUCTURAL INEQUALITY AND TO HISTORY OF PRECARIOUS WORK: p28, p52].
But if wealth were a result of hard work, African womxn As it was my job to collect onions on the farm, on one occasion I didn’t
such as those referred to in the report would be the come back with any onions because sometimes the things planted on the
richest people on the planet. farm like the onions would get eaten by garden pests. The white farmer’s
wife gave me a basket with a letter inside and sent me on an errand to the
nearest police station to deliver. She told me to run on foot from the farm
to the police station, the distance was about the same distance from here
Dade: in town to Soweto. I can’t say for certain how long it took, it took me a long
Street trader time, it was far, but I ran as fast as I could.
When I got to the police station, I handed over the letter to the officers
I am Dade, I am a street trader at the corner of Joubert and President, who were there. They read the letter and locked me in a cell. I didn’t know
which is now Helen Joseph. It’s been a long time since I was a street trader. what the letter said, maybe if I had gone to school and was able to read, I
would have opened the letter and read it on the way. But in any case, even
I am sure I have more than 40 years working as a street trader. I started
if I could read, if you are sent to deliver a letter by a white person from the
trading when I was very young, I didn’t go to school. [See Education affects
farm, you wouldn’t dare open the letter.
your chances at work: p35) I grew up working on a farm, that is why I didn’t
go to school. We used to work on a contract period of 6 months, but I was After some time having been locked in the cell, they open the cell and
on the farm from a very young age. My job on the farm was to look after the got in with a sjambok. The letter said they must beat me up. It said that I
farm owners’ onions. I was working to help out my parents. had been disobedient. I was locked up for well over half a day. They would
open when they wanted.

Inequality Report 2020 17

 Anyway, the letter would say how many strikes you were supposed to get. trying. I’ve had all my children while working here. They have grown up
Sometimes you would get two or three strikes with the sjambok on your under this table. I would rest only a few days after giving birth and I would
behind. Growing up these incidents made me tell myself that “mandi khula bring them here with me, keep them under the table and sell my goods
mina, angeke, angeke ndisebenzele umlungu emakitshini” (when I grow while they are here with me under the table. [XREF TO HOW WOMXN’S HOME
up, I would never work for white people as a domestic worker). RESPONSIBILITIES SHAPE THEIR ENTRY INTO THE LABOUR MARKET, p62]
It took quite a process to be permanently based here [where I am trading I’ve had five children, but only three are still alive. Even my oldest daughter
now], I had gone through several arrests and difficulties to get to this has worked as a street trader. I have a picture of her sitting at a corner and
point. [XREF TO HARRASSMENT OF INFORMAL TRADERS, p104-105]. selling spices. I work to support them, and they also do what they can

“
to help. [My grandchildren] are very young, and they are still at school; 5
A typical day
grandchildren and 1 great grandchildren.
Did you see my son? He On a daily basis, my days are spent here at this stall. I usually get to town
What are your dreams and challenges?
doesn’t work. We must be at around 5am, set up my table with my goods and cover them (other days I
here. You see over there have my son to help me out, but he is usually out looking for work because I wish I could register a business. But the problem is I don’t know where to
(pointing across the street he is unemployed), then I go to the market to buy produce and stock (the start, maybe I could apply for government tenders and opportunities. [XREF
to another stand), he has a
market opens at 4:30am and closes at around 11:30am) and come back to TO LACK OF CREDIT FOR SMALL BUSINESS, p89-90]. But I don’t know how to
trolley, he is also trying. I’ve
had all my children while my stall after that and sometimes we also have traders’ meetings. write a business plan, I don’t know how to put together a business profile
working here. They have
grown up under this table.
“ What would happen if you stopped doing what you do?
and other documents that are required. I don’t have any of the necessary
requirements to go and look for better job and work opportunities. If I could
I don’t want to be here anymore. There is no money in what I am doing. learn how to put together these documents, because I have gone to the
Back then when there weren’t a lot of us doing this, things were better local municipality offices and I can’t fill in the forms and provide any of the
in terms of income, but now there is very little money in what I am doing. information they require. I would also like to go to school to learn how to
My body has been sitting at this corner for many years enduring such cold read and write, because I understand English, but I never went to school
temperatures, it has become very hard. I know that I don’t want to do this to learn to read and write. I have gone to try and see if I can take classes,
anymore, but I don’t know how I am going to stop. Even all these meetings but they are too expensive for me to afford. [XREF TO EDUCATION SHAPES
and workshops that we attend, we remain hopeful that maybe there will YOUR JOB PROSPECTS, p35]
be opportunities for us to have better businesses. For me being here is
very hard, but because I don’t have any other choice, I continue to come
back here, but personally, I don’t like being here anymore.
Did you see my son? He doesn’t work. We must be here. You see over there
(pointing across the street to another stand), he has a trolley, he is also

18 Inequality Report 2020

 Buhle: Contract
worker/job seeker

My name is Buhle, I don’t know whether I should say I am a worker from A typical day
Heineken or not because currently I am dismissed, and I am just sitting at
Another person would probably not tell you, but it is hard. I told you that I
home. I live in Palm Ridge. I am a mother of two sons. I live with my siblings
live with my whole family. My father is a pensioner. My mother is not working.
and my parents, and there is a total of nine of us in the house.
I don’t work anymore. There are kids at home. And there is no income now
Apparently at work after we stood up against issues of sexual harassment because I was the one who was bringing in the income at home. [XREF TO
that were occurring at work, issues of labour broking, our case became WOMXN BECOMING HOUSEHOLD HEADS, p37-38] We are stuck. We feel like

“
something big and they didn’t want to deal with it. [XREF TO WHAT MAKES life is pointless. The only income we have now is from the social grants.
THE WORKPLACE UNFRIENDY FOR WOMXN, p68] So, they tried by all means Other than that, we are stuck.
to kick us out of the company. They started suspending workers daily for
It is social grants that we use. We pay rent with this money, buy food, get I told you that I live with my
things like striking, they started cutting our shifts saying that they’ll let us
the necessary things that the children need for school. As I have said, it whole family. My father is
know when we should come in to work again, until this day they haven’t a pensioner. My mother is
is very hard.
called us back to work. They told us that our agent that was LSE Masake is not working. I don’t work
no longer working with the company. But there aren’t any documents that I am actively looking for work, sending out CVs etc. but nothing looks anymore. There are kids
say that we have been dismissed. They just told us we will call you when promising. Even my mom is trying to hustle by collecting recyclables. [X at home. And there is no
there is space. [XREF TO PRECARIOUS WORK p61-69; XREF TO LABOUR LAWS, REF TO UNEMPLOYMENT, p48] income now because I was “
p110-111] the one who was bringing in
I would be lying if I said there was anyone outside of my immediate family the income at home.
It was a permanent post. We have never not been told not to come to work. who helps support us. My grandmother has her own household to support.
This started when we started raising questions about contract workers, So, my immediate family and I are on our own. If there is no food at home,
employee benefits, harassment issues and boycotting. Then they started there is no food.
giving us shifts and dividing us as workers. We tried to raise our voices
What are your dreams and challenges?
and fight for our rights as workers, but they put a stop to that by telling
us numerous reasons why we can’t come to work, citing reasons such as I wish things would work out well. I wish I could get a permanent job so I
slow production, they are waiting for bottles and other reasons. They kept can feed and support my family. As I said before, my father is a pensioner,
saying they’ll call us back, but they never did. so I am under a tremendous amount of pressure, it is like I am forced to
work in order to support my family. I really wish in the future I could get a
[I was last at work] in February 2019. Others it has been longer, since last
year.

Inequality Report 2020 19

 good job, for the children to go to school and not drop out because things fighting for your rights but you deserve to be treated with dignity. I don’t
like this could cause the children to drop out of school. So, I just really have the answers that would be helpful right now, try thinking and looking
wish I could get a permanent job. [X-REF TO PRECARIOUS WORK, p61-69] into things that you are good at, and seeing if those could be turned into
business ventures, look at joining co-ops and always think of the future
I wish I could choose, but unfortunately, I can’t choose because at the
you would like to have and to remain hopeful that things won’t always be
moment I am a beggar. So, any job that comes up for me, for my family to
like this.
eat and for me to be okay, I wouldn’t choose I would take that job.

“
So, to add onto what I have just said, it is unfortunate that we lost our
[If I got a permanent job] my first priority would be my family to have a
jobs fighting for our rights, and weren’t just fighting for womxn only, we
house that we own. [X-REF TO SOCIAL INEQUALITY, p28-38, HOUSING]. I
were fighting for the rights of every worker at Heineken. There is nothing
it is unfortunate that we mentioned earlier that we are renting, I want shelter that I know that even
more painful than working and not seeing what you are working towards.
lost our jobs fighting for if my parents were to pass away, I want them to rest knowing that their
our rights, and weren’t just You try to fix one thing and another problem arises. [XREF TO CHANGES IN
children are safe, they have a warm home. I would have a stable job and
fighting for womxn only, we LABOUR LAWS]
income and I would know that God has blessed me with the opportunity
“
were fighting for the rights
of every worker at Heineken.
to provide shelter for my family. Now we live with uncertainty, the owners
of where we stay could kick us out, anything can happen. None of us are
We are still fighting, I always tell my comrades that we aren’t just fighting
for us, we are fighting for the rights of future workers as well so that
working, if we got kicked out, where would we go? It’s really rough. they don’t have to experience the things that we have experienced. It
is unfortunate the person who had employed us had a malicious heart
Based on the story that I have just told you, where do you see a girl like
and let so many of us go and terminated people’s contracts without any
me ending up? What kind of future do you think I can have? Because
justification. [XREF TO INTO THE FUTURE UNDER THE HISTORY OF PRECARIOUS
normally many girls end up as “prostitutes” or they end up in bad
WORK, p62]
situations like human trafficking. [X-REF TO TRANSACTIONAL SEX IN FACE OF
RETRENCHMENTS, p68] The case is still going on. It’s been 2 years now. So many people along the
way have lost hope, I don’t want to lose hope; I want to keep fighting. We
Interviewer: This is a very difficult question for me to answer, because
are getting help from the Casual Workers Advice Office (CAWO), they have
I know now things seem extremely difficult to bear, we live in a country
been helpful in informing us about our rights as workers and connecting
with very high numbers of unemployment, and having been a job seeker
to legal assistance with various issues. They have also been encouraging
previously myself, I know how hard things must seem at the moment. But
us not to lose hope.
I would encourage you to remain hopeful, to always stand up for your
rights and what you believe in, and it is really sad that you lose your job

20 Inequality Report 2020

 Kgotatso: Retail
Worker

I work in sales. My work involves selling gym memberships to customers I was five years old when I heard the word lesbian for the first time. I was
at one of the big shopping malls. I have been unemployed for over 3 sitting with my dad and he was having a beer, we were both watching
years, and I was placed in my current occupation by one of these youth Brenda Fassie on TV. The interviewer asked Mabrr a question and she said,
development agencies. I never knew the real extent to which people walk “I’m a lesbian”. I was fascinated by this word and asked what it meant.
past and through you, when you are trying to sell them something. It is After it was explained to me, I then said to my father, well that’s what I am.

“
especially difficult when people don’t really know how to place me, when
I did not, and still am unable to comprehend for myself an attraction and a
they do not know “what” I am. I know this because I see how they interact
love for men. Many of my dearest and closest friends, growing up and now
with my colleagues who are not like me.
are men, but to be in a romantic and sexual relationship with them feels We cannot drink water on
My typical day at work includes so many indignities that I and the other unnatural to me. the floor, we have to be
womxn face. Things are so difficult there, that to even talk about our searched every time we
Growing up, and finding more girls like me felt really good. By that I mean leave and enter the shop.
challenges with each other is almost impossible, we are watched, watched
girls who “according to others” dress like boys and like other girls. Being There is always drama
how long we talk to each other, how much time we spend on our phones, when I need to be searched
different can be very lonely and dangerous. I remember in 2007, after the
how we are smiling or not smiling. because I’m somewhere in
cases of Sizakele and Salome, two lesbians who were brutally raped and
-between. I’m not a man,
We cannot drink water on the floor, we have to be searched every time murdered were reported in the media, my parents were so mad at me for
neither and I am womxn.
we leave and enter the shop. There is always drama when I need to be the rumours that they were hearing on the street. They were so mad, I also don’t identify with
searched because I’m somewhere in -between. I’m not a man, neither and asking me if I am what people say I am, a lesbian. It almost felt like they either, and no one will“
I am womxn. I also don’t identify with either, and no one will listen to me were asking me if I was going to burden them with this too; knowing that listen to me insist on what
insist on what is comfortable. we already live lives of struggle at home. is comfortable.

We declare everything in our bags and pockets every day, the day it My grandmother, father, aunts and brothers and sisters live in the same
shocked me the most was when I got into trouble for not declaring my household. I am the primary provider, and have never in my life had a job
tampons. I had them in my pocket and they were loose, like coins. I did not that has paid me enough to survive.
imagine that I could be threatened with arrest, just because I did not want
Don’t get me wrong, there is a lot of joy in my family. My favourite thing at
to tell people that I was menstruating.
home is hot summer days when we bring out the music and everyone talks

Inequality Report 2020 21

 really loudly over the music with us breaking into awkward dance moves
when the spirit moves us.
My dreams, are really not that huge. I want to build my grandmother a
bathroom, to work in an environment where my dignity is respected and
I am paid a living wage, and to be able to live and love freely. Ok, I want
millions too.

“
I have a university degree that I would like to sell for money, I haven’t been
able to use it and I still owe NSFAS over R200 000 for it. I did everything I
I have a university degree was supposed to, I worked really hard for that degree, I was ill for most
that I would like to sell for of it, I went back to school after the illness had forced me to drop-out
money, I haven’t been able and I was in a class older than my classmates, and went back to school
to use it and I still owe
without any other safety net. It is really strange that even then, I know
NSFAS over R200 000 for
it. I did everything I was
that I am still better than so many of my counterparts that I went to school
supposed to, I worked really with. You see, of us children who went to township schools, very few of us
hard for that degree, I was make it to university, let alone get whatever qualification we studied for. I
ill for most of it, I went back got the degree, and I STILL don’t have a job that can meet my basic needs.
to school after the illness
had forced me to drop-out The way I look is something I am always so conscious of, except for when
and I was in a class older I am in queer spaces. Interviews are generally anxiety inducing, and you
than my classmates, and “ should see how interviewers get when I walk in, in a shirt and a tie and
went back to school without how their heads get into a spin when they see breasts under my shirt
any other safety net. (chuckles). It would be really funny, if I didn’t know that “fitting in” is a
prerequisite for many jobs.
Being an organizer is really important for me to remain hopeful.
Understanding why the world works how it does, and that it’s not my fault
as an individual is so important to remember whenever, I feel stuck and
despondent. But I really would like to catch a break, and I don’t know how
that will happen with so much seemingly stacked against me, being black,
being womxn, being queer and having no wealth to fall back on.

22 Inequality Report 2020

Johann Rupert’s
entrepreneurial secrets
According to the business-news agency Bloomberg, conglomerate, Richemont. The company owns stakes in well-known
brands such as Van Cleef & Arpels, Azzedine Alaia and Piaget.
Johann Rupert is the world’s 238th richest person,
with a fortune of R103.4 billion at the start of 2020 - up Rupert serves as chairman of Richemont, Remgro; a restructured iteration
of Rembrandt Group created in 2000 -- and Reinet Investments; a holding
R19 billion since the start of 2019. This makes him the company he founded in 2009 to control Rembrandt’s stake in British
richest South African. American Tobacco. As an avid sportsman, he designed the course at
his Leopard Creek Golf Club in Nelspruit, which he bought in 1995 with
Having rich parents professional golfer Gary Player.
Johann Rupert took big risks in his life, but he started off with big backing. The billionaire is also chairman of the South African PGA Tour, a lifelong
member of the European Tour, and the founder of the Laureus Spor.”
“Johann Peter Rupert was born on the 1st of June, 1950, in Stellenbosch,
the oldest son of billionaire industrialist Anton Rupert and his wife, Huberte. From https://www.bloomberg.com/billionaires/profiles/johann-p-rupert/
A self-made businessman, his father had founded the tobacco company
Rembrandt Group in 1948. After attending school in Stellenbosch, the Dominating the economy
younger Rupert enrolled at University of Stellenbosch to study economics
Johann Rupert is in your tea, on your sandwich and on your wine list.
and corporate law. He didn’t graduate, choosing to move to New York,
If you’re not eating him, you’re drinking him - Bonolo Ramokhele
where he took a trainee position with Chase, Manhattan.
I missed the interview last week that had black people seething. The
After five years in New York -- working first for Chase, then for Lazard Freres
following day, I ran through Remgro’s stable, which is one of Johann
-- he returned to South Africa where he founded Rand Merchant Bank.
Rupert’s companies.
A few years later, the bank merged with Rand Consolidated Investments
and Rupert joined the family business. Rembrandt diversified into wine I must say, Remgro has some good brands, including as it does Nola
and spirits and various South African sectors, including banking, mining, Mayonnaise; Rainbow Chicken, which is a significant supplier of chicken
food and packaging. In the late 1980s, Rupert took over from his father to KFC in the country; Sunbake bread, Yum Yum peanut butter; Piemans
as chairman of Rembrandt. One of his first big moves was spinning off pies; Selati sugar; Mageu; Ouma rusks and Rama, to name a few - all of
Rembrandt’s European assets and forming the Swiss luxury goods which indicate a significant number of usage in black households.

Inequality Report 2020 23

Rupert could choose to From https://city-press.news24.com/Voices/how-we-make-johann-rupert-rich- Taking your privileges for granted
skip his degree but poor daily-20181211
children have much fewer How rich would the Ruperts be if they had not been white?
opportunities without Born into a social class where your work will reap extra rewards One audience member said Rupert’s white privilege had helped enable
education, and much less
success in education. Having great power in one part of society attracts status and recognition his current level of wealth and suggested that he use some of it to
in other parts of society so that the super-rich appear multi-talented, help boost young black entrepreneurs in Mamelodi. Rupert said: “I’ve
Fewer than four out of
when they are in fact just rich. tried my best. My people who work with me are happy. They’ve all got
ten kids from the poorest
households complete homes, I look after their kids and give them bursaries, and I’m not Father
primary school in the usual
“Mr. Johann P. Rupert is Chairman at Reinet Investments Manager Christmas that can look after the whole country”.
time, compared to 84% SA, Remgro Ltd., Compagnie Financière Richemont, and Peace Parks
Foundation. He is also a Chancellor at the University of Stellenbosch and “I’ve been luckier than I thought I would, I made more money than I
of kids from the richest
households, and compared Managing Partner at Compagnie Financière Rupert SA. He is on the Board thought I would and that I often think I deserve, and my mother taught
to the 99% completion rate of Directors at Renshaw Bay LLP and Rembrandt Trust Pty Ltd. He was me to share, and I really give away a lot more money than I spend on our
of the poorest households previously employed as Executive Chairman by Compagnie Financière family. Quite frankly, I don’t need lessons in sharing, because I know
in Europe and North America. Richemont SA and Richemont North America, Inc., and as Chairman by what I do and luckily the people close to me know what I do.”
(Statistic via Chris Malikane)
Richemont SA, Merchant Bank and VenFin Ltd. He also served as an From https://www.news24.com/SouthAfrica/News/johann-rupert-branded-arrogant-
Officer at Rembrandt Group LLC, The Chase Manhattan Bank NA, and racist-i-cant-be-father-christmas-for-the-whole-of-south-africa-20181205
Lazard Freres & Co. LLC.
“His wife … breeds racehorses because he talked her into it… he loves
He served on the board at Rothmans International BV, British American the feeling she gets when her prized horse wins a coveted race. Besides
Tobacco Plc, and James Purdey & Sons Ltd. Mr. Rupert earned an breeding horses, Gaynor looks after Drakenstein Farm. Johann and
Honorary doctorate degree in Economics and graduated with a degree Gaynor are blessed with one son and two daughters.
in Company Law at the University of Stellenbosch, South Africa. He was
also awarded an Honorary doctorate in Commerce from Nelson Mandela Rupert owns Franschhoek Motor Museum that is home to his personal
University. collection of over 200 antique cars including his very own 63 Ferrari
Lusso GT. Years back, his son had a minor accident with his Ferrari F50 on
From https://www.marketscreener.com/business-leaders/Johann-Peter-Rupert-80/ the [grounds of the] museum.
biography/
From Buzzfeed
See What is the Minerals-Energy Complex? Page 77

24 Inequality Report 2020

Black industrialists
Race and gender inequality persist right to the top of Services of South Africa and director-general in the Gauteng provincial
South Africa’s class structure: by 2019 there were only government. He is now the chairperson of Metrobus Limited, director of
Eyesizwe Mining and a non-executive director of SA Tourism.
two black men, and one white womxn, amongst South
Africa’s 24 richest people. However, even CEOs from Presiding over job losses
humble beginnings, whose struggle connections paved Under his directorship in 2015, Exxaro suffered a setback which has led
their way to narrow the gap between themselves and to its Arnot contract coming to an end, and the7 company closing the mine
that had supplied the power plant since 1975 .
the richest whites, tend to make their fortunes in ways
Although Mntambo retained his position, however, more than 1 500 jobs
which heighten inequality overall. were lost. Also, under his directorship at Metrobus Limited, Metrobus
For example, Vincent Mntambo; ranked 29th on the list of the richest services in some parts of Johannesburg were disrupted in 2018 after the
people in South Africa (net worth estimated at R914.9 million)4. Though he company failed to reach an agreement with the Democratic Municipal and
is perceived as humble5, Mntambo is also deemed “discreet” when making Allied Workers’ Union of South Africa (DEMAWUSA). This left commuters
money moves. Now a non-executive director at Exxaro, his life has not stranded and about 300 drivers affiliated to the union subsequently
been without overcoming hurdles. He was a leader of the 1976 Soweto embarked on a strike8.
students’ uprising, dubbed “master dodger” because he was never
In September 2019, the members of DEMAWUSA declared another dispute
arrested by the police. He matriculated in 1977 and later obtained a law
because the minority union demands an office space in three Metrobus
degree at the North-West University, then a Masters at Yale University in
bus depots and for salaries to be paid according to the number of years
Connecticut, America6.
one has been in service. Unfortunately, the company’s failure to reach a
He is now the chairperson of ASG Consulting Solutions. He was a lecturer at deal with the drivers will leave more than 30 000 passengers stranded and
the University of Natal, an executive director of the Independent Mediation having to make other means of getting to work9.

4
Vincent Zwelibanzi Mntambo, 59 WallStreet Journal https://quotes.wsj.com/ZA/EXX/company-people/executive-profile/165251, accessed 11 September 2019
5
Blignaut. M ,2018, “Vincent Mntambo might be South Africa’s humblest multi-millionaire” Briefly, https://briefly.co.za/7119-road-riches-vincent-mntambo-south-africas-humblest-multi-millionaire.html
6
M&G, “From master dodger to master builder1995”, Mail & Guardian, https://mg.co.za/article/1995-03-10-from-master-dodger-to-master-builder>. viewed 11 September 2019
7
Omarjee. L, 2018, “Eskom overlooked Exxaro to benefit Tegeta, inquiry hears”, Fin24, https://www.fin24.com/Companies/Mining/eskom-overlooked-exxaro-to-benefit-tegeta-inquiry-hears-20180215, accessed 23 September 2019
8
Ngqakamba S 2018, News24,viewed 12 September 2019, 6 June,< https://www.news24.com/SouthAfrica/News/metrobus-operations-affected-in-johannesburg-after-stalemate-in-negotiations-with-demawusa-20180606
9
ANA reporter 2019, “Johannesburg Metrobus strike continues, millions lost, IOL, 19 September, https://www.iol.co.za/news/south-africa/gauteng/johannesburg-metrobus-strike-continues-millions-lost-33252247> accessed 20 September 2019

Inequality Report 2020 25

A
A - Dimensions of structural inequality

Dimensions
of Structural
InequalitY

26 Inequality Report 2020

A - Dimensions of structural inequality

A1 Social inequality Pg 32

A2 Income inequality and wealth inequality Pg 39

A3 Labour market inequality Pg 45

Inequality Report 2020 27

A - Dimensions of structural inequality

Men Womxn Black White Rich Poor

Dimensions of
Structural Inequality and prejudices about
the affected groups. For
What is the problem example, it is easy for
with inequality? white people to hold on
Inequalities have serious to the idea that they are
personal consequences, but superior to black people
depriving the indigenous,
inequality is also a problem for because there are many
the whole society. Inequalities
black population of
poor black people and few
raise moral concerns about land, surface water and
poor white people.
fairness and social justice, and livestock and c) forcing
they also have socially divisive slaves and indigenous Inequalities include
tendencies. Inequalities people into various forms unequal outcomes (income
therefore undermine of unfree and exploitable inequality, educational
community solidarity and labour10. Within these achievement or health)
contribute towards political
processes, womxn were and unequal opportunities
instability and violence. Levels
of inequalities also undermine used and abused in (access to quality
economic growth and poverty particular ways, ranging education, employment,
The contrasting life
reduction strategies. As a from sexual abuse to infrastructure, land
stories above tell us
result, children from low- subsidising the migrant and so on). Herein,
that inequality prevents
income earning households labour system by carrying unequal outcomes and continued high levels of
with low levels of education people at the lower end
a greater burden in the opportunities reinforce inequality in South Africa.
tend to experience unequal of the scale from fulfilling South Africa’s history
‘homelands’11 as men each other.
access to education, slowing themselves and developing of extreme inequality is This report focuses on
were pulled into work.
down the development of their their full worth; inequality rooted in three historical The persistent gaps in three level of inequality
human potential and limiting Unfortunately, these
is not a manifestation processes: a) establishing infrastructure, and other in South Africa - social
their ability to rise out of processes are still
of laziness or individual political and economic resources inherited from inequality, economic
poverty (their social mobility). expressed today in some
failings or successes; and power structures which the apartheid system, inequality, and labour
Income inequality can also pockets of the South
negatively affect economic it does not arise because entrenched the white made worse by the market inequality;
African society.
growth and increase poverty some people work harder, population in a privileged neoliberal policy response wherein race and gender
by limiting mass purchasing are smarter, or take bigger position against the Group inequality nourishes and rising global inequality, are at the forefront of
power. risks. indigenous population; b) and feeds on stereotypes are foundations for these inequalities.

10
Terreblanche, S. (2002). A History of Inequality in South Africa, 1652—2002. University of Natal Press, Pietermaritzburg.
11
For readers who are not familiar with South Africa, the ‘homelands’, also called bantustans or reserves, were tiny areas of South Africa which the apartheid government designated as supposedly self-governing territories in which the majority of black South Africans would be allowed to reside after
being deprived of South African citizenship.

*The columns represent the inequalities for different groups

28 Inequality Report 2020

 A - Dimensions of structural inequality

Men Womxn Black White Rich Poor

Rising inequality is
a tendency in the system
The rich got richer faster than
Social inequality
everyone else between 1980
describes differences in and 2016:
access to services. For
is discussed further in • Across all regions, the
example, public schools
section A.2. top 0.001% grew their
may be of very good incomes by 275%, while
quality in one part of a Labour Market inequality the bottom 50% earners
city and very poor quality encompasses the idea of the world’s population
in another. Healthcare, that different people have grew their incomes by
roads, water services – different experiences only 94%.
these are things which with work. For example, • The growing income
some people have more a white man is likely to inequalities are expressed
access to than others in be paid much more for in a comparison between
South Africa. These are doing the same job as a the lowest income
discussed in detail in black womxn. Womxn are earners [bottom 10%] and
the top income earners
section A.1. more likely to be involved
[top 10%] over time. The
in precarious work and top 10% earned 15 times
Economic inequality
much more likely to be the incomes of the bottom
includes income inequality
contributing a significant 10% and by 2016 this had
and wealth inequality.
portion of their time in grown to 21 times that of
Income inequality has to a year, but that person is the bottom 10%.
unpaid care work, without
do with how much more a likely to have much more
which the economy as a • The growing income time. Executive company
certain group makes than than 200 times the wealth
whole could not function. inequalities are also directors earned 85 times
another group. Usually includes income inequality of the poorer person, in
This is discussed further shown when we compare the incomes of the bottom
we talk about the 1% and and people’s assets. So part because the poorer the lowest income earners 10% in 2013 and this had
in section A.3.
the 99% or the top ten a wealthy person may person has less money [bottom 10%] with median grown to 100 times the
percent and the bottom earn 200 times more to buy anything. Wealth See the graphic on p.16 income of company income of the bottom 10%
50%. Wealth inequality than a poorer person in and income inequality for more details. executive directors over in 2017.

12
Marx K. (1954). Capital I, p.603. For Piketty T. (2014). Capital in the Twenty-First Century, p.25, the tendency towards wealth concentration occurs if the rate of profit is greater than the growth rate of the economy.

*The columns represent the inequalities for different groups

Inequality Report 2020 29

A - Dimensions of structural inequality

This report is concerned Poor education, housing location etc means people can’t get better jobs
with inequality at and
around work (labour market
inequality) and income Social inequality
inequality. This diagram (e.g. unequal access
shows some components to education, housing,
of labour market inequality rights)
and income inequality and
how these interact with
social inequality within the
framework of economic Gender Inequality page.
structure. It illustrates how

Those with low wages /

some forms of inequality Precarious

wealth can’t afford

enable other forms. Labour market work
‘Intersecting’ inequalities inequality
do not simply add layers of (Stratification of the
Unpaid care
inequality upon each other: quality of work and The expectation and reality of womxn’s
work (page 1)
they mix. For example, the opportunities unpaid home responsibilities channels Responsibilities at home
Usually done by womxn
to work (page 1) them towards work at the margins and interfere with womxn’s work
intersection of income around the home is
lower ranks of the labour market. For and earnings. Low earnings
essential to society, but
inequality with gender There are more example, accepting the uncertainty of its economic value is
keep womxn in the home
inequality reinforces a womxn in low informal work because it accommodates unrecognized and not
paid sectors. family duties more easily.
view that womxn are big rewarded financially.
children by making them Womxn are more
more dependent on others. likely than men to
be unemployed
This diagram focuses on Informal work Income
gender. Other inequalities (page 1)
not shown here, such as Inequality
Wealth
race, also come into play. Inequality

Definitions: Intersecting
inequality (“Intersectionality”).
Wage differentials / business insecurity; exploitation

30 Inequality Report 2020

A - Dimensions of structural inequality

The word intersectionality is not important for this report, A note on gender labels: Why womxn?
more so than the idea is. An intersection is the area where
two things overlap – like the purple parts of the sketches Why men and womxn?
above. This is very similar to a traffic intersection, where
two streets cross. When the word is used to refer to There is no way to understand inequality in South Africa that this understanding and work around gender is not as
oppression, it reminds us that the overlap produces without recognizing that it is highly gendered. We know normalized as it should be.
something new. Similarly, ‘intersecting’ inequalities do that to understand poverty and inequality, we have to
This report, does not explore gender and sexual diversity
not simply add layers of inequality upon each other: they consider how men, womxn and gender non-conforming
in depth, but does recognize it. In this report, and in the
mix together to produce unique forms of inequality. For and non-binary persons are differentially affected.
development of the report and workshops around the
example, the oppression of poor womxn is not simply the Hetro-patriarchal and cis-normative notions of understanding campaign, we did ensure that we have people who do not
oppression of rich womxn plus poverty. Rich womxn do face gender, work along the assumptions that there are only identify within the strict hetero normative gender binaries
sexism in the boardroom and often remain responsible for two genders, male and female and only one kind of sexual in the room. We also consulted literature that can assist
their homes, but they may escape from the home to some orientation, which is heterosexual. These are historical in the nuancing of the argument on gender and inequality.
extent by hiring another womxn as a nanny or domestic realities that were connected with the construction of This is all far from sufficient, and this note is to highlight
worker. The poorer womxn, on the other hand, inherits a the racist, sexist and classist South African state through this limitation.
double burden of doing her own housework as well as paid violent conquest.
In this report we use the term womxn, we understand this
work, and her paid work is often undervalued because
An inability to conceive of gender, outside the binaries is a spelling to signal a more inclusive conceptualization of
it is poor womxn’s work. To be a black womxn in a racist
reflection and inheritance of a colonial past and of a neo- womxnhood. It explicitly includes, not only cis-gendered
world is not just racism plus sexism: it changes the form of
liberal patriarchal environment. womxn but also transwomxn and femme/feminine
sexism and also the form of racism. A sexist employer, for
identifying gender-queer and non-binary persons.
example, might think his own wife is too weepy, emotional These notions, evident even within social justice initiatives,
Therefore, when we refer to data, and when we write
and delicate for work but regard black womxn employed do not consider gender and sexual diversity in defining the
about men and womxn, we are aware that this includes all
by him as “unnaturally emotionless” because they are problems, and in thinking about solutions to intervene.
genders, and is definitely an area for further research.
trying not to offend him (and may never question the same
All other experiences and expressions that are different
characteristic in black men). The word was first used in
from the “standard” are seen as not respected/studied
this way by Kimberly Crenshaw, a lawyer in the USA who
and people become invisible.
had to prove that black womxn were facing discrimination
in a particular industry where white womxn and black men This is despite the fact that sexual orientation and gender
were being hired in numbers, leading employers to claim identity and expression diversity is explicitly protected
they were neither racist nor sexist. Crenshaw argued that in the constitution, challenges such as recurring stigma
they were both because black womxn in particular were and violence towards sexual and gender minorities means
not getting work.

Inequality Report 2020 31

A1 Social
Inequality
 A - Dimensions of structural inequality Social inequality

A note on race labels:

who is ‘Black’ in this report? More than 9 out of 10 white students pass matric each year
The concept of inequality in
South Africa is largely linked to
WHITE STUDENTS
apartheid and how it created
and entrenched four main
racially based categories that
were always confusing. We do 7 out of 10 ‘African’ students pass matric each year
not like these categories, but
we need to use them because
BLACK STUDENTS
the census still uses them
and these historic divisions
still shape inequality today.
‘African’, for example, was Despite the democratic dispensation, South Africa is still characterized by
used to classify everyone
extreme social inequality, made worse by race, class and gender inequality.
who was not classified
‘White’, ‘Coloured’, ‘Indian’, Inequalities in education, health status and household living conditions
or ‘other Asian’, but African indicate that the black population, and black womxn in particular, bear the
also means anyone from this brunt of this inequality. The position of black womxn compared to white
continent, so apartheid’s men is a sharp indicator of the levels of inequality in a society.
‘Indians’ are actually African.
As a result, this problematic
system produced even more
problematic and ambiguous
names. To avoid this
confusion, this report uses
black to mean people who
would have been classified
‘African’ during apartheid,
although we realise that this
can also create a difference.

13
Van der Berg S. (2007). Apartheid’s Enduring Legacy. Journal of African Economies 16, p.849—880.
14
Moses E., van der Berg S., Rich K. (2017). A Society Divided: How Unequal Education Quality Limits Social Mobility in South Africa, p. 21.

Inequality Report 2020 33

A - Dimensions of structural inequality Social inequality

Access to university
and college education
• The scores for mathematics
and the sciences in schools
SOCIAL Alomst 3 out of 10 White men have attended tertiary education which were classified ‘African’
INEQUALITY: during apartheid are roughly
EDUCATION WHITE MEN
half the scores for schools
which were classified white
• Only 8% of A-grade mark
Differences in Fewer than 1 in 10 Black men have attended tertiary (6.6%) achievers were people who
educational would have formerly been
achievement classified as ‘Africans’13
are important in BLACK MEN
sustaining other • By the age of 24, fewer
kinds of social and than 1 in 10 people formerly
economic inequality. classified ‘African’ will
Alomst 4 out of 10 White womxn have attended tertiary education
It is important to note be enrolled in any kind of
that the quality of educational institution14
education (measured WHITE WOMXN
• Less than 1 in 10 youths with
in class sizes, the a tertiary qualification are
number of pupils per unemployed
teacher, and so on) About than 1 in 10 Black womxn have attended tertiary (9.6%)
• 5 out of every 10 youths
is connected with
without a matric are
racial inequality, BLACK WOMXN unemployed
which leads to racially
skewed achievement • Youths with post school
in education). education earn 60% more
Note that this only shows attendance, not graduates. Black students have higher dropout
rates and take longer to get degrees for many reasons ranging from financial difficulties than youths with matric
and travel distance to the difficulties of adapting to white culture at the formerly white
institutions and lack of resources at the previously black institutions.

34 Inequality Report 2020

 A - Dimensions of structural inequality Social inequality

Educational achievement for each race/gender15

A note on race labels: who is ‘Black’ in this report?
100%
100%
The concept of inequality in South Africa is largely linked to
apartheid and how it created and entrenched four main racially 80%
80%
based categories that were always confusing. We do not like
these categories, but we need to use them because the census 60%
60%
still uses them and these historic divisions still shape inequality
40%
40%
today. ‘African’, for example, was used to classify everyone who
was not classified ‘White’, ‘Coloured’, ‘Indian’, or ‘other Asian’, but 20%
20%
African also means anyone from this continent, so apartheid’s
‘Indians’ are actually African. As a result, this problematic system 0%
0%
produced even more problematic and ambiguous names. To Men
Men Women
Women Men
Men Women
Women Men
Men Women
Women Men
Men Women
Women
avoid this confusion, this report uses black to mean people who
AFRICAN/BLACK COLOURED INDIAN/ASIAN WHITE
would have been classified ‘African’ during apartheid, although AFRICAN/BLACK COLOURED INDIAN/ASIAN WHITE
we realise that this can also create a different kind of confusion
because ‘black’ was a political identity during apartheid for all
those who were not classified white by apartheid and who did
Other High Diploma and Matric plus certificate Less than plus Matric Less than
not aspire to whiteness and rejected apartheid’s divisions, so
University Degree / diploma certificate / diploma only matric
‘Biko Black’ included people classified African, Coloured and
Indian by apartheid.
Source: Labour Market Dynamics, 2016. Downloaded from Stats SA http://www.statssa.gov.za/ in September 2018
In much of the report we present only white and black (not Biko
Black) to simplify the amount of information that the reader
has to take in. This is not because we think the position of
‘coloured’ and ‘Indian’ people is unimportant, but because it is Education affects your chances at work:
difficult to find statistics that combine, for example, black and Average hourly wage:
coloured people, yet it seldom adds much to our understanding Race and gender override education
to present all four categories. Readers can assume a pattern when it comes to income
repeated across all the information, which is that ‘coloured’
people are on average slightly above black people on average, Black womxn with a university degree, and who are
but much, much closer to black people than to whites. (If we
aged between 18 and 34 years have a median income
were categorising people statistically rather than according
of about R13 000, compared to about R17 000 for
to the categories inherited from apartheid, ‘coloureds’ would
be part of Black people.) Meanwhile, people classified ‘Indian’ with grade 9 matric with a degree white womxn aged between 18 and 34 years with a
during apartheid are on average some way above ‘coloured’ and R6/hour R12/hour R36/hour university degree. At the lower end of the scale, white
black people, but still closer to these categories on average than men and womxn with no matric , regardless of age,
to white people on average. Where we have presented all four have better median incomes compared to African
categories, we retain the labels ‘coloured’ and ‘Indian’ although womxn with matric16, regardless of age.
they are unsatisfactory.

15
For consistency, the female should be womxn.
16
For readers who are not familiar with South Africa, matric is the final year of schooling in South Africa.

Inequality Report 2020 35

 Out of every 1000 babies born
A - Dimensions of structural inequality Social inequality
alive, how many die before
Out of every 1000
the age babies born
of five?
alive, how many die before
the age of five?
Poorest households compared to richest
Out of every 1000 babies born alive, how many die before the age of five?
Poorest
87 households compared to richest

SOCIAL Poorest households

compared to the richest
87
22

22
“
The national public health sector, staffed by
some 30% of the doctors in the country, remains
INEQUALITY: Rural households compared to urban the sole provider of health care for more than
HEALTH 71 households compared to urban
Rural
40 million people who are uninsured and who
constitute approximately 84% of the national
Rural households
compared to urban population. Approximately 16% of South Africans
71
43 (8 million people) have private health insurance
People often say, that provides access to health care from the
wealth is nothing
Source: B Sanders17.
43 remaining 70% of doctors who work full-time in
“
without health. But in the private sector
There are many possible causes for these tragic deaths: it could be accident or inborn
very unequal societies,
illness, it could be disease or dirty water, it could be that the nearest clinic is far or
health and wealth because a private doctor is expensive so the parents hesitate to go there, it could be Under the current health system, one must have
often go together. because the mother has to go to work leaving younger children with other children or at a good paying job to afford medical aid in order
a crèche that is not safe, it could be child abuse. However it is clear that a single factor, to have a fighting chance at life.
poverty, plays the key role in exposing babies to all these risks. Poor families in South
Africa are at much greater risk of losing their children at an early age.

1 out of 10 households headed by a black person has medical aid Nearly 3 out of 10 urban househols have medical aid

URBAN
BLACK PERSON
HOUSEHOLDS

7 out of 10 households headed by a white person has medical aid Fewer than 1 out of 10 rural households has medical aid

RURAL
WHITE PERSON
HOUSEHOLDS

Source: Vulnerable Groups Indicator Report (2015 &2016); Men, Women and Children (2014/2015)

17
Sanders B. Health Inequalities and Their Social Determinants in South Africa: Implications for Policy and Practice.

36 Inequality Report 2020

A - Dimensions of structural inequality Social inequality

Out of every 10 households in South Africa... Average household expenditure each year
Out of every 10 households in South Africa.... for households headed by:
SOCIAL White man,

It takes 7 of these to equal one of these

INEQUALITY: R396 000

HOUSEHOLD More than 3 are headed More than 4 are Fewer than 1 by a
White woman,
R258 000
CONDITIONS by black womxn headed by black men white man or womxn
Black man,
R75 000

About 4 out of 10 Black households are headed by a womxn

Household living Black woman,
R58 000
conditions revolve
especially around Source: Vulnerable Groups Indicator Report (2015 &2016); Men, Women and Children (2014/2015)

expenditure, but the

The section on health (above) exposes other household inequalities
size of the household
also matters because
Households headed by black women support more people: more than
it determines how
half are extended families (compared to a quarter of households
much each member
headed by Black men, a fifth of those headed by white women and
of the household
one tenth of households headed by white men.) Extended families Around four out of ten households headed by womxn
benefits from
are disproportionately taxing when it comes to maintenance and are without employment, compared to about 2 out of
the expenditure.
care work. ten households headed by men.
Households headed
by black womxn tend At the same time, with the ‘feminisation’ of work [see
to be poorer than Compared to 3 out of 10 White households p67, p95], more and more households are headed
other households by by womxn.
several measures.

Inequality Report 2020 37

A - Dimensions of structural inequality Social inequality

There are more poor households in rural areas and more womxn-headed • RDP18 houses often entrench
SOCIAL INEQUALITY: households in rural areas. There are more womxn than men in the former
‘homelands’, which are usually rural areas. The top of the bars represent the
the geographical inequalities
PLACE AND SPACE total number of people in a category. The black part of the bar covers people still
of apartheid because they
are usually built on low
INEQUALITY living in former homelands, the grey part is anywhere else. The numbers are in value land on the edges of
millions. For example, there are more than 20 million ‘African’ men shown in the townships instead of in the
graph below.
The location of your city centres close to work
household affects the opportunities. The houses
quality of your life and themselves are often low
access to other resources. 25,0 quality.
If you live in a former 20,0 • More than 3 out of 10 South
millions

township, transport 15,0 Former

13,3 13,5 Africans travel more than
is expensive to get to “homelands”
10,0 30 minutes to their place
work, for example, and
5,0 of employment.
the infrastructure is 8,0 8,9
3,0 3,2 2,2 2,3
-
usually worse than in • Almost 2 out of 10
Other
Men Women Men Women Men Women areas households reported
a formerly white area.
Your location affects AFRICAN/BLACK COLOURED OR ASIAN WHITE spending one third or more
opportunities to find work of household income on
or run a small business. Other areas Former “homelands” transportation per month.

Source: Labour Market Dynamics, 2016. Downloaded from Stats SA http://www.statssa.gov.za/ in September 2018

18
For readers who are not familiar with South Africa, the Reconstruction and Development Program (RDP) houses are subsidized by government (but built by private contractors) for people who earn very little and have never owned a house before.

38 Inequality Report 2020

 A2
C - What is behind classist, gendered & racialised labour market inequality in South Africa? What is the Minerals Energy Complex?

Income
inequality and
wealth inequality

Inequality Report 2020 39

A - Dimensions of structural inequality Income inequality and wealth inequality

Income inequality
and wealth inequality
There is ample evidence that income inequality a person owns that may be of value). Income inequality also plays a big
role in wealth inequalities: to acquire assets and to keep them, people
(differences in what people earn) is the main driver of need to earn enough to have something left after their survival needs.
other kinds of inequality. When there are weaknesses Wealth inequality makes a difference to your health, i. e. how long you will
in the provision of public services such as health and live, your children’s chances of dying before they are five, and their social
mobility. The difference in rates of infant deaths between the lowest and
education, households with low income are unable to
the highest income earners is mainly due to wealth inequalities20. Over
access private quality services, thus limiting social the generations, children of wealthy families accumulate capital faster
mobility. Wage inequality accounts for between 80% than children of poor families, making them more socially mobile. In this
and 90% of overall inequality. Hundenborn et al. (2018) section we use a set of aggregate measures to analyse the income and
wealth gap between those at the top and those at the bottom.
find that changes in labour income are the main
The majority of South Africans have very few assets. According to numbers
driving force behind income inequality, wherein “the
derived from Credit Suisse’s “Global Wealth Report”, nearly 7 out of every
changes in labour income worsen inequality and are 10 South Africans (nearly all black and disproportionately female) own
driving the increase in the Gini coefficient by 6.6 or wealth less than R117,000.21 But there are a few South Africans who have
0.045 points between 1993 and 2008”19. a lot of assets. According to the Financial Times, about 1 out of every 10
South Africans own 90 % of the wealth, while about 9 out of 10 own 10% of
Wealth inequality differs from income inequality in that it includes both the wealth.22 Both in South Africa and globally, wealth inequality is much
income (the amount of money a person earns in a year) and assets (things greater than income inequality.

19
Hundenborn J., Leibbrandt M., Woolard I. (2018). Drivers of Inequality in South Africa. WIDER Working Paper No. 2018/162.
20
Humanity Divided: Confronting Inequalities in Developing Countries. United Nations Development Programme, 2013, p. 9.
21
Markus Korhonen. 2018. ‘FACTSHEET: Wealth in South Africa’. Africa Check. 22 March 2018. https://africacheck.org/factsheets/factsheet-wealth-south-africa/.
22
Bruce-Lockhart, Chelsea, and Joseph Cotterill. 2019. ‘Black South Africans Lose out as Economic Divide Bites’. 2 May 2019. https://www.ft.com/content/42ef27d2-6c13-11e9-a9a5-351eeaef6d84.

40 Inequality Report 2020

 A - Dimensions of structural inequality Income inequality and wealth inequality

The most important form of assets for the rich are financial assets – Despite the rhetoric about intergenerational class mobility, most people’s
stocks, bonds, equities, life insurance and so on. STATS SA estimates that income and levels of wealth in South Africa are determined by their birth.
about two-thirds of assets held by South Africans are financial assets.23 For 9 out of 10 people who have entered the labour market, their earnings
This type of asset is particularly important because it is also a type of are determined by what their parents earn.25 By international standards,
income. As Thomas Piketty demonstrated in his landmark Capital in the this is a very low level of mobility. This works the other way as well; such that
21st Century (2017), inequality skyrockets when the very rich can make if a person’s parents is among the top earners, they have a 70% likelihood
as much or more money through speculative investment than through of being a top-earner when they enter the labour market themselves.
productive investment [see p31 on speculative investment].24 In South Moreover, despite what we hear about free markets and individual choice,
Africa, profit and capital gains from such investment account for 50% of the structure of South African wealth and income inequality looks more
income for the richest 1%. like a caste system, where one’s social status is determined at birth, than
a system of free association among people of equal value.
To put this in context, if rich people who own financial assets can see
those assets grow at a rate of 10-20% per year, but the market economy Additional information on income and wealth inequality is on the back
is growing at only a rate of 4% a year, not only will inequality continue to cover of this report.
increase, but the rich will never invest in the productive economy made
which is made up of the production and trade in goods and services that
meet our basic needs. [Turn to p81 on financialisation]

23
STATS SA. 2019. ‘Inequality Trends in South Africa: A Multidimensional Diagnostic of Inequality’. 2019. https://www.afd.fr/en/ressources/inequality-trends-south-africa-multidimensional-diagnostic-inequality. See page 56.
24
Piketty, Thomas. 2017. Capital in the Twenty-First Century. Harvard University Press.
25
STATS SA. 2019. ‘Inequality Trends in South Africa: A Multidimensional Diagnostic of Inequality’. 2019. https://www.afd.fr/en/ressources/inequality-trends-south-africa-multidimensional-diagnostic-inequality. Page 139

Inequality Report 2020 41

A - Dimensions of structural inequality Income inequality and wealth inequality

Black womxn’s housing

is less valuable
THE 1%
INCOME The richest 1%
of the world’s THE RICH • Property valued at less
INEQUALITY population now than R50 000 is most
likely to be owned and
AND WEALTH have as much
headed by a black
wealth as the
INEQUALITY: rest of the
THE 99% womxn28

WEALTH GAP world combined26: EVERYONE ELSE • Property valued over R1

000 000 is most likely to
be owned by a white man

Company CEO Salary Pay Gap The corporate

pay gap
Shoprite R100.1 million 1332 Ownership of housing is
Steinhoff R88.9 million 234 This table shows an important determinant
• As one of the richest of access to formal credit.
Capitec R35.6 million 183 the gap between
people in South Africa, The value of the property,
MTN R72.2 million 157 the CEO and the
Nicky Oppenheimer, has a as collateral, influences
lowest paid
net worth of $7.7 billion by Anglo American R70.2 million 135 access to capital for
worker in a productive opportunities.
2018. Assuming he earns Ab InBev R23.4 million 82
selection of Access to financial assets
10% rate of return on this, Sasol R56.4 million 64 companies and enables access to economic
he could support more than Mediclinic R18.0 million 28 state owned opportunities, enables
3 million workers at the Transnet R7.4 million 21 enterprises: individuals to accumulate
national minimum wage on savings, borrow against
Rand Water R5.1 million 15 accumulated financial assets,
his return alone27.
Eskom R8.9 million 13 and make investments in
SABC 3.6 million 5
productive activities.

Source: Francis. D and Massie, K. 2018. Tackling Wage Inequality: Pay ratios and capping pay. In M. Nassen Smith (ed) Confronting Inequality: The
South African Crisis. Jacanda: Johannesburg

26
PwC, Executive Directors: Practices and Remuneration, 2017, p.3.
27
This assumes a national minimum wage of R20/hr, an 8-hour working day, and 20 days a month. His net worth converted at R/$13.78.
28
General Household Survey, 2017. (2018). Statistics South Africa

42 Inequality Report 2020

A - Dimensions of structural inequality Income inequality and wealth inequality

South Africa’s growing income gap

If this is the income of an earner in the lowest 10% of incomes … Definitions: What is a median income?
INCOME Imagine you get everyone in the
population to stand in a line arranged
INEQUALITY from the lowest earner to the highest
…then this is the 2010 income of an earner in the highest 10%…
AND WEALTH earner. Then count half the people and
draw a line at the halfway mark. Now ask
INEQUALITY: x15
the person standing on the line what
their income is – that is the median
SOUTH AFRICA’S …and this is the 2016 income of an earner in the highest 10% income.
GROWING x21 Why use medians?
INCOME GAP Mean averages – where you add all the
incomes then divide by the number of
AND EXECUTIVE Source: Labour Market Dynamics reports
2010 2016
incomes – are fine for working out fair
PAY GAP shares of the total, but when you have
one or two extremely high incomes
South Africa’s growing executive pay gap which are far above most incomes,
mean averages are misleading. Johann
Median income of an earner in the lowest 10%
Rupert’s income makes us all seem
x1 richer than we are using mean averages.
For example, a group of ten people
earning 1000 a month has the same
Note: Executives include Chief 2013 median income of a company executive mean average as a group of ten people
Executive Officers (CEOs), Chief where one earns R9000 a month and the
x85
Financial Officers (CFO) and other nine each earn only R111 a month.
Executive Directors. When CEOs But the median in the second case
alone are compared to a black 2017 median income of a company executive will be much lower than the median in
the first. In other words mean average
womxn, the pay gap is x149 x100 incomes hide inequality, whereas
(see front and back cover) medians reveal it.
Earner in lowest 10% 2013 2017
Source: Labour Market Dynamics reports

Inequality Report 2020 43

A - Dimensions of structural inequality Labour market inequality

Incomes are being shifted from wages

INCOME and salaries to profits
INEQUALITY AND The graph below shows how company incomes have been divided between wages
and profits since 1970. The share going to salaries and wages has shrunk below half
WEALTH INEQUALITY: while the share going to profits has grown to more than one third.
INCOMES ARE
BEING SHIFTED Income for all industries, 1970-201329
FROM WAGES 70% 70%
70%
AND SALARIES 60%
60%
60%
TO PROFITS 50%
50%
Salaries
Salaries and
and wages
wages

50% 1994 Profits

Profits
Salaries and wages
40%
40% 1994 Other
Other Profits

The graph below shows how 40% 30%

Other
30%
company incomes have been
divided between wages and 30% 20%
20%
profits since 1970. The share 10%
10%
going to salaries and wages 20%
has shrunk below half while 0%
0% Salaries
Salaries and
and wages
wages
10% 2012
1970
1972
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
1970
1972
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
Profits
the share going to profits has Profits
Other
grown to more than one third. Other
0% Salaries and wages
Compensation to
Compensation to employees
employees as
as a
a share
share of
of net
net income
income
2012
1970
1972
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
Profits
Net
Net operating
operating surplus
surplus as
as a
a share
share of
of net
net income
income
Other

Compensation to employees as a share of net income

Net operating surplus as a share of net income

29
Data source: SASSID 2014

44 Inequality Report 2020

A3
A - Dimensions of structural
A - Dimensions inequality
of Structural Inequality IncomeLabour market
Inequality andinequality
Wealth Inequality

Labour
Market
Inequality

26
PwC, Executive Directors: Practices and Remuneration, 2017, p.3.
27
This assumes a national minimum wage of R20/hr, an 8-hour working day, and 20 days a month. His net worth converted at R/$13.78.
28
General Household Survey, 2017. (2018). Statistics South Africa

Inequality
45
Report 2020 Inequality Report
452020
A - Dimensions of structural inequality Labour market inequality

Labour market
inequality
The labour market is a key mechanism for creating Labour market lingo:
• Unemployed – official definition: someone who is not employed, self-
income and gender inequality as wages and salaries employed, a pensioner or a student and is actively looking for work
usually differ depending on the quality of the job, • Unemployed – expanded definition: as above but includes those who want
gender, the sector, type of occupation, and the lack to work but have given up looking for work (discouraged work seeker)
of jobs. • Unemployment rate: the unemployed as a fraction of the labour force

This section describes the South African labour market through an • Labour force: all those employed (including self-employed) plus all those
unemployed
intersectional analysis of class, race and gender. It shows that job
segmentation based on race, gender and class remains a major sticking • Labour market participation rate: the fraction of the working age
point. Black womxn in South Africa are most likely to be unemployed or population in the labour force
less likely to be employed, they do more unpaid work than men, and are • Labour market absorption rate: the fraction of the working age population
most likely to be employed in low wage highly insecure service sector that is employed
jobs in private households, community and social services. On the other • Working age population: individuals that are considered able and likely to
end, white men are the least likely to be unemployed or most likely to be work between the ages of 15 until 64
employed, the least likely to do unpaid work, and are most likely to be
employed in high wage jobs. Interestingly, the number of womxn who are
own-account workers in the informal sector has declined such that the
sector is dominated by men. By own-account workers, we mean that they
work for themselves, not for someone else.

46 Inequality Report 2020

A - Dimensions of structural inequality Labour market inequality

Who participates in the labour market? Who gets work?

LABOUR MARKET 8 out of 10 working age white men are working or looking for work
(a slight decline since 2008)
7 out of 10 working age white men are employed.

INEQUALITY:
WHITE MEN WHITE MEN

WHO
PARTICIPATES 6 out of 10 working age white womxn are working or looking
5 out of 10 working age white womxn are employed.
IN THE LABOUR for work

MARKET? WHO WHITE WOMXN WHITE WOMXN

GETS WORK?
6 out of 10 working age black men are working or looking for work A bit more than 4 out of 10 working age black men are unemployed
(increased since 2008)

BLACK MEN BLACK MEN

5 out of 10 working age black womxn are working or looking A bit more than 3 out of 10 working age black womxn are unemployed
for work

BLACK WOMXN BLACK WOMXN

6 out of 10 working age youths are working or looking for work A bit more than 4 out of 10 working age youths are employed

YOUTHS YOUTHS

High rates of participation in the labour force coupled with low

rates of absorption imply high unemployment rates for that group.

Inequality Report 2020 47

A - Dimensions of structural inequality Labour market inequality

Unemployment rates … including discouraged30 job seekers

For every 10 white men who participate in the labour force, For every ten white men who participate in the labour force, less
LABOUR MARKET fewer than 1 is actively looking for work than 1 want work (including those who have given up looking)

INEQUALITY: WHITE MEN WHITE MEN

UNEMPLOYMENT
RATES... For every 10 white womxn who participate in the labour force,
fewer than 1 is actively looking for work.
For every ten black womxn who participate in the labour force,
4 want work (including those who have given up looking).

INCLUDING WHITE WOMXN BLACK WOMXN

DISCOURAGED
JOB SEEKERS For every 10 black men who participate in the labour force,
2 are looking for work. Inequality amongst men has widened
BLACK MEN Inequalities among men seem to have increased faster than
inequalities between rich men and poor womxn. In 2010 the highest
earning 5% of men earned 23 times the earnings of the lowest
earning 5% of men. By 2016 it was 50 times more. The highest earning
For every 10 black womxn who participate in the labour force,
3 are looking for work. 5% of men earned 35 times the lowest earning 5% of womxn in 2010
and 50 times in 2016. So the gap between high earning and low
earning men is now as big as the gap between high earning men and
BLACK WOMXN
low earning womxn.
These developments are most likely the result of increasing class
inequality and increasing racial inequality. It shows that there is no
For every 10 youths who participate in the labour force,
5 are looking for work solidarity between men across classes. Although there is inequality
between men and womxn who are working class and poor, they
YOUTHS
have more in common with each other than with people of the same
gender in a higher class.

30
Statistics SA has two measures of unemployment. The narrow definition only counts people as unemployed if they looked for work in the week before the survey. The broad definition includes people who want to work but have given up looking for work.

48 Inequality Report 2020

 A - Dimensions of structural inequality Labour market inequality

2500
It seems harder for black people to find work 2000
or satisfactory alternatives to work 1500

LABOUR MARKET 5 out of 10 discouraged work seekers are African men; 4 are African
womxn but only 2 out of one hundred discouraged work seekers are
1000

500

INEQUALITY: white men and womxn. A little more than 1 out of every 10 black people
0

al
g

r
ds
re

s
g
IT SEEMS HARDER

he
or
is a discouraged work seeker. Moreover, a little more than 4 out of every

tie
rin

nc
io

ad
in

ci
tu

l
sp

ho
ct

Ot
ry

so
na
Tr
ili
tu
ul

tru

an
ar

e
Ut
c
ric

Fi

&

us
fa
qu
10 Youths are not in education and not employed.

Tr
ns
Ag

ity
nu

ho
Co
&

un
FOR BLACK PEOPLE

Ma

te
ng

iva
ni

m
Mi

Pr
Co
TO FIND WORK OR Womxn are channelled towards low quality jobs Gendered occupations33
SATISFACTORY Womxn are much more likely to be employed in low-wage service sector The orange bars represent the number of females in each occupation
ALTERNATIVES TO jobs in private households, community and social services. These are
also the sectors with worsening insecurity.31 Womxn are fewer in
and the purple bars represent the number of males. The height of each
bar represents the number of people in that category. The figures on
WORK AND WOMXN occupations that are higher waged and higher skilled. Employers tend the left are in thousands – for example, 500 000 females are in the
to think that womxn are most suited for work that seems to resemble professional category (which includes most nurses) in the graph below.
ARE CHANNELLED womxn’s roles at home, such as cleaning, working with food and
TOWARDS LOW various kinds of care work. 2500

2000

QUALITY JOBS Sectors: Men outnumber womxn in most sectors of the 1500

economy.32 1000

500
The yellow bars represent the number of womxn in each sector and 0
the pink bars represent the number of men. The height of each bar

ry
n

es

re

de

...

er
r

k
al
ge

er
ia

ta
ne

rk
tu
on

ic

tra
ic

Cl
na
represents the number of people in that category. The figures on

en

wo
ul
rv

hi
si

hn
Ma

d
se

ric

ac

em
es

te
c

tic
It appears that, to a significant extent,

Te

m
ag
of

la

El
the left are in thousands - for example, there are 500 000 womxn in

es
an
Pr

nd
re
ed

m
s

ta
nd

Do
ill
womxn have achieved greater access to

le
manufacturing in the graph below.

Sk

an
ta
Sa

Pl
af
employment through replacing men in

Cr
Female Male
more vulnerable and ‘lower-quality’ jobs. The graph shows that womxn outnumber men only in community and
services, and domestic work in private households. Source: Calculated from Statistics South Africa. Labour Market Dynamics 2016. Electronic database.

Norms about gendered economic roles contribute to universal and long-lasting occupational segregation, insecurity of womxn’s work, growing precariousness of work, and womxn’s unequal burden of care
work, to name a few of the daily realities facing womxn in precarious circumstances. Ideas about ‘natural male and female qualities are often problematic, such as womxn are expected to be homemakers
and have nimble fingers; while men are expected to be breadwinners who do heavy, technical and physical work. Conversely, there is also the role that norms about the economy play in several areas of
policy making and in private sector practices that prevent women from accessing dignified work. For instance, norms that convey the economy as only the so-called ‘market’ (while ignoring non-market
activities) or norms that do not recognize private homes as workplaces, help to perpetuate the exclusion of domestic and home-based workers from labour laws, and the failure of statistics to capture
unpaid carers as labour force participants. Cost-benefit analyses do not happen in a vacuum, but are influenced and framed by gender norms and norms about the economy that need to be challenged
and unpicked in order to realize womxn’s right to dignified work. The recognition that change also needs to tackle deeply rooted social norms provides another baseline for long-lasting changes in the
field of policy making, changes in the current social organisation of care and private sector practices. [X-REFERENCE TO THE RECOMMENDATIONS SECTION, p15-16]

31
PDi Paola, M., & Pons-Vignon, N. (2013). Labour market restructuring in South Africa: low wages, high insecurity. Review of African Political Economy, 40(138), 628-638
32
Data source: Quantec 2018
33
Data source: Quantec 2018 and for consistency, the female should be womxn

Inequality Report 2020 49

A - Dimensions of structural inequality Labour market inequality

Changes in gender and employment status for men and womxn34 Female Male

LABOUR Employer Employee

800 800
MARKET 700 700

INEQUALITY: 600 600

500
500
CHANGES IN

‘000s
‘000s
400 400
GENDER AND 300 300

EMPLOYMENT 200 200

100
100
STATUS FOR 0 0
MEN AND

2008/03/31
2008/09/30
2009/03/31
2009/09/30
2010/03/31
2010/09/30
2011/03/31
2011/09/30
2012/03/31
2012/09/30
2013/03/31
2013/09/30
2014/03/31
2014/09/30
2015/03/31
2015/09/30
2016/03/31
2016/09/30
2017/03/31
2017/09/30
2018/03/31
2018/09/30
2008/03/31
2008/09/30
2009/03/31
2009/09/30
2010/03/31
2010/09/30
2011/03/31
2011/09/30
2012/03/31
2012/09/30
2013/03/31
2013/09/30
2014/03/31
2014/09/30
2015/03/31
2015/09/30
2016/03/31
2016/09/30
2017/03/31
2017/09/30
2018/03/31
2018/09/30
WOMXN
Own account worker Unpaid household member
800 120
Yellow bars: represent the number 700 100
of females in each employment 600
status 80
500
Pink bars: represent the number of

‘000s
‘000s

males 400 60
The height of each bar: represents 300
40
the number of people in that 200
category 20
100
The numbers below the graph show 0 0
2008/03/31
2008/09/30
2009/03/31
2009/09/30
2010/03/31
2010/09/30
2011/03/31
2011/09/30
2012/03/31
2012/09/30
2013/03/31
2013/09/30
2014/03/31
2014/09/30
2015/03/31
2015/09/30
2016/03/31
2016/09/30
2017/03/31
2017/09/30
2018/03/31
2018/09/30

2008/03/31
2008/09/30
2009/03/31
2009/09/30
2010/03/31
2010/09/30
2011/03/31
2011/09/30
2012/03/31
2012/09/30
2013/03/31
2013/09/30
2014/03/31
2014/09/30
2015/03/31
2015/09/30
2016/03/31
2016/09/30
2017/03/31
2017/09/30
2018/03/31
2018/09/30
the half-years
The figures on the left are in
thousands - for example, there
are 700 000 females who are own-
account workers in 2018. Each
blue-orange pair shows the number
of people in that category over a six The graphs above show that men outnumber womxn in all forms of employment, but many more womxn than men are unpaid household members.
month period. There used to be more womxn than men who are self-employed (own-account worker), but the number of self-employed womxn has declined a little
In these graphs, the tops of the while the number of self-employed men has risen a lot. [Why? Turn to p72]
bars also become a line showing The absolute number of womxn unpaid household members has been falling since 2008 while more womxn are entering the workplace as employees.
the changes for that category. This is not, however, lessening gender inequality [Why? Turn to pg 57].

34
For consistency, the female should be womxn

50 Inequality Report 2020

 A - Dimensions of structural inequality Labour market inequality

In 2017, out of every 10 top managers in South Africa...

LABOUR MARKET INEQUALITY: OCCUPATIONAL

MOBILITY – IS THE LABOUR MARKET CHANGING?

Occupational mobility is one of the important markers of whether there are changes taking Fewer than 1 is a 1 is a white Almost 6 are
place in society. The apartheid system suppressed the talents of the black population 1 is a black
woman
black man woman white men

and, through entrenched networks, blocked career progression of black professionals

and denied skills development and training to workers at the bottom of the wage
distribution. A little progress was made towards transforming the demographic profile of
the managerial segment of the corporate sector, but these seem to have been recently
reversed. Gradin (2019) finds that there is “no compelling evidence that distribution of • The proportion of black people in top management has declined slightly
occupations has been disaggregated [and there remains] over-representation of blacks since 2010.36
in low-paying jobs. The situation in 2015 is the same as it was in the mid-1990s”35
• White men account for less than 6% of people employed in the formal
private sector, but account for more than 30% of senior managers in
the formal private sector. In contrast, African womxn account for about
36% of the employed population, but account for about 4% of senior
managers in the private sector.

35
Gradín, C. Occupational segregation by race in South Africa after apartheid. Rev Dev Econ. 2019; 23: 553– 576. https://doi.org/10.1111/rode.12551
36
PwC, Executive director’s: Practices and Remuneration Report, 2017.

Inequality Report 2020 51

A - Dimensions of structural inequality Labour market inequality

In conclusion, we have spent a lot of time in chapter A describing the state of economic inequality at
the intersection of race, gender and class more broadly and specifically by looking at social inequalities,
economic inequalities and an overview of the labour market. There are a few factors that we have noted.
Social inequalities such as education, access and quality health, as well as location play a significant
role in generating income opportunities (see section A.1). Secondly, economic inequality has worsened
since apartheid and wage inequality is a key driver of income inequality followed by unemployment (see
section A.2). Thirdly, we have also seen that the South African labour market remains highly segmented
on gendered and racial lines. Social norms that shape womxn’s work in the household, are extended in
the market economy (see section A.3). Womxn do a lot more unpaid work than men (see section A.2i).
These differences in gendered unpaid work on the one hand disrupts the ability of womxn to do market
work in their lifetimes, while on the other hand put men at an advantage to do more market work in their
lifetimes. While womxn have increased their participation in the labour market since the end of apartheid,
they have generally occupied low-wage service sector jobs in private households, community and social
services. These are also the sectors with worsening insecurity. 37Womxn are fewer in occupations that
are higher waged and higher skilled. Employers tend to think that womxn are most suited for work that
seems to resemble womxn’s roles at home, such as cleaning, working with food and various kinds of
care work. Indeed, womxn’s wages are generally 30% below the wages of men. Fourth, the South African
labour market remains highly segmented on racial lines. The broad classification of womxn and men
hides the extent of racialised inequalities. Interestingly, differences in skills does not alone account
for these inequalities as we have seen that young black womxn with the same level of educational
achievement at university level as white men and womxn earn 16% less than white men and womxn. The
youth do not fair better with high unemployment levels that are shaped by their low levels of educational
attainment. Moreover, young black womxn with a matric will earn less than young white men and womxn
without a matric. The focus of the next chapter of the report is on how inequalities are expressed in
the work of womxn living on the margins in three categories of work: unpaid work, precarious work and
informal work.

37
Di Paola, M., & Pons-Vignon, N. (2013). Labour market restructuring in South Africa: low wages, high insecurity. Review of African Political Economy, 40(138), 628-638

52 Inequality Report 2020

B
B - Womxn at the margins

Womxn at the
Margins: Unpaid,
Precarious, Formal
and Informal Work

Inequality Report 2020 53

B - Womxn at the margins

B1 Unpaid care work Pg 56

B2 Precarious work Pg 60

B3 Informal work Pg 70

54 Inequality Report 2020

B - Womxn at the margins

Womxn at the Margins: Unpaid, Box 3: Oxfam’s 10-point definition of dignified work for womxn
For Oxfam, dignified work entails 10 substantive elements:
Precarious, Formal and Informal 1. A recognition that unpaid care work is work, and should be counted and valued
Work as such. Unpaid care work should be shared more equally between the state,
the private sector, civil society organizations, and men and womxn, facilitated
by improvements in infrastructure, technology and public services.
Womxn workers are often denied their rights while
2. Enjoyment of the right to work and equal employment opportunities.
carrying an economic system that benefits the few,
not the many. Gender stereotyping, restrictive legal 3. A balanced distribution of work, family and personal life.

frameworks and discrimination put millions of womxn 4. Remuneration that meets at least the basic needs to enable a dignified
standard
in low-paid jobs, unsafe working conditions, with few of living (including living wages in case of wage earners).
labour rights or benefits, low status jobs that are often
5. Equal pay for work of equal value.
temporary, part-time or seasonal.
6. Full control over income generated from work.
Therefore, womxn forced to live on the margins are typically subjected to
undignified work and are forced to do more care work (paid and unpaid) 7. Work stability and security, as well as opportunities to enhance skills
than men. Oxfam’s approach to dignified work builds on the International and for improved career pathways.
Labour Organisations’ widely accepted concept of decent work and its main 8. Social protection for workers and their families, including access to appropriate
dimensions, but goes beyond this to fully embrace the notion of work as healthcare, entitlement to paid sick leave and rest, pensions, and adequate
one of the valuable dimensions that enables a dignified life. Building on the compensation in case of unemployment or reduced income.
ILO’s well-known agenda, we seek to push further the boundaries of what
9. Freedom of movement and communication at work, as well as freedom from
is defined as work in order to ensure an individual and collective sense of
coercion and any kind of violence.
dignity for womxn. For Oxfam, dignified work entails 10 substantive elements
listed in Box 3. In this section, we will zoom in on three segments of the 10. Respect for workers’ rights, including freedom of association, freedom to form
labour market: unpaid work (section B.1) and precarious work (section B.2) unions and engage in collective bargaining, and prohibition of all forms of
and informal sector work (section B.3) (the drivers of unemployment are forced labour/trafficking for labour exploitation, elimination of child labour, and
discussed in the next chapter). The chapter will showcase the extent to non-discrimination in employment.
which womxn in these types of work are exploited by the economic system.

Inequality Report 2020 55

B1
B - Womxn at the margins Unpaid care work

Unpaid
Care Work

56 Inequality Report 2020

 • Unpaid work in South Africa is valued
UNPAID CARE WORK at roughly 14% of GDP.
• About 2.6 million people who are not
The work done mainly by womxn in the home
otherwise economically active report
for love or duty is not included in calculations
of the size of the economy or its growth; 10.8 Trillion •
that they are homemakers
The number of people reporting
but the productive economy could not exist
This is what it would be worth if that they do unpaid work only has
without this reproductive economy which
we measured in money the time declined over the past decade.
feeds us, cleans for us, cares for us when spent globally cooking, cleaning,
we are old or sick, and raises our children. collecting water and firewood, • The value of unpaid work performed
Unpaid domestic work is usually considered and caring for children, elderly by black people in South Africa
to be outside the labour market. Yet womxn’s has been increasing over the past
and the sick
place and participation in the labour market decade, in contrast to other groups.
By the end of 2018, black womxn
is strongly shaped by the fact that womxn
contributed 59% of the value of
bear the greatest responsibility for private
unpaid work, African men 24% and
domestic work and care work. Womxn have white womxn 9%.
to choose or reject work depending on
how well it accommodates their domestic
responsibilities. Unpaid work is one of the
factors that explain lack of occupational and Employedman
Employed man Unemployedman
Unemployed man Not
Noteconomically
economicallyactive
active
social mobility of womxn. The UNDP notes 7474minutes
minutesinintotal
total 154
154minutes
minutes man
man108
108minutes
minutes
that a lot of research shows that, even after
accounting for education and age, there is
an earnings gap between men and womxn Household
Household
that is partly explained by interruptions in Care
Care How many minutes of each day
womxn’s employment histories related to Community
Community
do men and womxn spend on
raising children38. By disrupting womxn’s household maintenance, caring for
people, and community work?
education and employment history, for
example, unpaid work contributes towards
Employedwoman
Employed woman Unemployed
Unemployedwoman
woman Noteconomically
Not economicallyactive
active Employed womxn do more work
the slow occupational and social mobility of
190
190minutes
minutesinintotal
total 323
323minutes
minutes woman241
woman 241minutes
minutes at home than unemployed men do.
womxn. Sociologists have noted how even
womxn’s waged work is shaped by their Womxn on average spend twice
roles at home: womxn are considered best as long on home maintenance as
suited to undervalued forms of work that Household
Household men.
most resemble domestic drudgery (such as Care
Care
cleaning, serving food, and nursing). Community
Community Womxn on average spend six times
longer than men caring for others.

38
Humanity Divided, p.89/*SOURCE for 10 trillion: ILO. 2018. World Employment and Social Outlook: Trends 2018. International Labour Office, Geneva: ILO, 2018,
B - Womxn at the margins Unpaid care work

The following analysis is taken from Oosthuizen’s (2018) Counting 7.0

Women’s Work report. The report unpacks the gendered patterns of the Amount of time at
different ages that
amount of time people spending doing market work and non-market work 6.0
are spent by men
doing market work.
in South Africa over a 100 year cycle which is depicted in the graph on X

the right. The report finds that from 0 to 7, then the more time spent on 5.0
Amount of time at different
ages that are spent by men
a certain activity. The numbers from 0 to 90 show the different ages. The A doing non-market work or
unpaid work.
more we move from 0 towards the number 90, then the higher the age of

Hours per day

4.0
the average person. The solid blue line in the graph shows the amount of Amount of time that
men spend learning.
time at different ages that are spent by men doing market work. While the Y
3.0
dotted blue line shows the amount of time at different ages that are spent Amount of time
spent by womxn
by men doing non-market work or unpaid work. The dashed blue lines show doing market work
2.0
the amount of time that men spend learning. The solid green line shows Z Amount of time spent by
the amount of time spent by womxn doing market work, and the dotted womxn doing non-market
work or unpaid work.
1.0
green line shows the amount of time spent by womxn doing non-market
work or unpaid work. The green dashed line shows the amount of time Amount of time spent by
womxn doing learning
0.0
spent by womxn doing learning activities. So how do we connect these activities

dots to read the graph? Let us take point x on the graph. The point x shows 0 10 20 30 40 50 60 70 80 90+
Age
the market work of males. If we put our finger on point x and then drag it
down towards the horizontal line, then we hit the age number 30. If we go Source:Oostuizen, M. (2018). Counting Women’s Work South Africa. CCW Working Paper WP8. Nov 2018

back to x, and drag our fingers across towards the vertical axis, then we
hit a number that is between 5 and 6 hours which we can guess to be 5,8 us turn to non-market work done by womxn and men that are 30 years
hours. This means that men that are aged 30 spend about 5,8 hours doing old. Point z on the graph shows that the average 30 year old male spends
market work. If we want to compare the point x with the amount of time about 1,8 hours a day doing non market work whereas point a shows that
spent by a 30 year old womxn doing market work, then we can do a similar the average 30 year old womxn does close to 5 hours of non-market work.
exercise with point Y on the graph. Point Y shows the amount of time spent This means that the average 30 year old womxn in South Africa does more
by a 30 year old womxn doing market work. We see that 30 year old womxn non-market or unpaid work than the average 30 year old male. We can do
do 3 hours of market work per day. This means that the average 30 year this exercise across the age and time points on the blue and green solid
old man does more market work than the average 30 year old womxn. Let or dotted lines.

37
Di Paola, M., & Pons-Vignon, N. (2013). Labour market restructuring in South Africa: low wages, high insecurity. Review of African Political Economy, 40(138), 628-638

58 Inequality Report 2020

B - Womxn at the margins Unpaid care work

As Oostuizen’s (2018) report finds, this exercise reveals that womxn’s

market work is disrupted throughout their lives by the dominance of unpaid
or non-market work. The disruption of unpaid work on womxn’s market
work is experienced throughout most of their working age life span, and
is strongest between the ages of 20 and 60 years old. On the other hand,
the dominance of men’s market work over womxn is supported by the fact
that they do far less non-market or unpaid work in comparison to womxn
throughout their lives. Moreover, the strongest age for men’s time spent
towards unpaid work is in their retirement age around the age of 70 years
old, whereas for womxn it is during their working age around their late 20s
to early 30s.
The evidence in South Africa is similar to trends across the world. Globally,
the main reason given by womxn of working age for being outside the
formal labour force was that they were doing unpaid care work. For men it
was “being in education, sick or disabled”. In 2018, there were about 647
million full-time unpaid carers worldwide, and 94% of them were womxn.
Consequently, millions of womxn lose key opportunities in education,
fair earnings and social entitlements over their lifetime. It also stands in
the way of their full enjoyment of labour, social and political rights, and
limits their time available for other activities, including leisure. Across
all regions, womxn with care responsibilities are 3.9 % more likely to be
working in a family business than womxn with no care responsibilities,
and 8.7% more likely than men who are not care workers. Womxn with care
responsibilities are 1.8% more likely to be own-account workers (self-
employed, small scale) than womxn with no care responsibilities. (see ILO
Care economy 2018 report). These forms of paid work usually have working
conditions that are far from what the ILO labels as decent work.

Inequality Report 2020 59

B2
B - Womxn at the margins Precarious work

Precarious
Work

60
Inequality Report 2020 Inequality Report 2020
60
B - Womxn at the margins Precarious work

The global labour force

PRECARIOUS WORK
A major source of growing income inequality is the increase in precarious work – low-
6 out of 10 workers globally are precarious workers
quality, badly paid and insecure jobs such as those held by the increasing number
of subcontracted workers and the normalisation of casual work in supermarkets, for
example. Subcontracting is where the ‘core’ company pays a smaller company to provide 6 out of 10 workers globally are precarious workers
workers who are not regarded as employees of the core company, and who can be let
go at short notice without paying retrenchment packages by simply terminating the 2 billion people
contract with the small company. These subcontracted workers can be identified as
non-core workers. Cleaning and security, for example, are both generally subcontracted
2 billionglobally
More than 3 in 10 workers people are own account workers
in South Africa today. However, as we will see below, most subcontracted workers do the
job of core/permanent workers. Precarious work is not new in the Global South, but it
has been intensifying and spreading. In South Africa, precarious work dominated during More than 3 in 10 workers globally are own account workers
apartheid, was reversed in the later years of apartheid, and has become normalised
again after apartheid. It is becoming the ‘normal’ form of work. Precarious workers earn
1.1 billion people
low wages, have few or no benefits such as pensions or housing allowance, work under
poor conditions and often face job insecurity. Black womxn, particularly migrant womxn,
are most likely to find themselves in precarious forms of work. 1.1 billion people

Inequality Report 2020 61

B - Womxn at the margins Precarious work

Domestic work in South Africa

PRECARIOUS 8 out of 10 employed womxn globally are precarious workers

• There were more than 1.1 million domestic workers employed in

WORK: WOMXN
private houses in SA in 2011. More than three quarters of them are
WOMXN ARE womxn

MORE OFTEN • Domestic work is the third largest employing sector in South
Africa
PRECARIOUS Womxn in developing countries earn, on average, the • 9 out of 10 domestic workers are so-called ‘African’ and the
WORKERS equivalent of R8 rand for every R10 that men earn. remainder are so-called ‘Coloured’ (1 in 10)

Mothers tend to earn lower wages because child-bearing and child- In a 2009 survey of domestic workers, nearly 99 % do not have an
care interrupt their interactions with the labour market and they seek employment contract although their employment has been formalised
employment in family-owned and family-friendly jobs, which tend to into South African Labour law, they are dismissed without notice,
Globally, womxn occupy
they do not receive assistance with their pensions.
precarious positions in what pay lower wages.
is designated as the care and
service economy, which is
characterised by low wages,
In South Africa, 3 out of 10 employed womxn are in ‘elementary’ More than 1 out of 10 womxn employed in SA are domestic workers
poor working conditions and occupations...
job insecurity. Womxn can be
found working in home-based WOMXN WOMXN
care, childcare, catering,
cleaning, retail, sales and
customer services, all of
...compared to 1 out of 10 men. 8 out of 10 domestic workers earn less than the minimum wage
which are low-wage sectors.
The social and economic
system, which is based on MEN WOMXN
patriarchy or the social and
economic oppression of
womxn, is typified by practices
which tend to undermine and
underplay the contributions
that womxn make to
the economy.

38
Muñoz, A. and Izquierdo, op cit. p3.
39
Ibid. p3.

62 Inequality Report 2020

 B - Womxn at the margins Precarious work

In this graph, the numbers up the side show the growth or decline in wages over time, as a percentage
of wages in the previous year

PRECARIOUS WORK:
DECLINING WAGES IN Real wage growth, global and by country income group, 2000-17 (percentages)

THE ‘GLOBAL SOUTH’ 10

8
• Wages are the main source of
income for 1.7 billion employees

Real wage growth

6
globally
4
• Real wages declined overall in 2017
by 3%, according to the Global
2
Wage Report 2018/19
• The decline is sharpest in the low 0
and middle income countries, as
the graph below shows: -2
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Low & middle income World High income

Source: Global Wage Report41

Wages in middle and low income countries have declined substantially, overall, over the past 17 years.

41
ILO. 2019. Global Wage Report 2018/19 https://www.ilo.org/wcmsp5/groups/public/---dgreports/---dcomm/---publ/documents/publication/wcms_650553.pdf p xiv

Inequality Report 2020 63

B - Womxn at the margins Precarious work

AAlittle
little more than1 in
more than 1 in
10 10 were
were precarious
precarious workers
workers in 2004 in 2014

PRECARIOUS There were 1.8 percent more core jobs in 2017

than in 2014, and 2.2 percent more non-core
WORK: Core Non Core Informal Unemployed
jobs
THERE HAS BEEN workers workers workers
• There are about 5.4 million casual workers
A GROWTH IN MoreMore
thanthan
2 in 10
2 inwere precarious
10 were workers
precarious in 2017
workers in 2017
in South Africa

PRECARIOUS • The majority of workers who do not have

permanent contracts are doing permanent
WORK. work. More than 8 out of 10 labour broker
workers are doing permanent work,
All workers are exploited, and Core Non Core Informal Unemployed according to Cassim and Casale.
workers workers workers
being a permanent worker in South
Africa does not mean that you earn
a living wage that will guarantee Precarious work has grown faster than the other sectors from 2004 - 2017
your own well-being, let alone
your family’s well-being. However, 2,5
2,2
precarious workers experience Labour brokered workers tend to be black
2,0
an even greater burden. In South 1,8 womxn who are breadwinners that are
Africa, the number of precarious 1,5 supporting families in a context where men
jobs is increasing faster than other have been retrenched.
kinds of work. Today’s permanent 1,0

worker is tomorrow’s precarious

0,5
worker. That is why it is important
that all workers, permanent and 0
precarious, must come together to Core Non-core

fight against exploitation. Growth or decline from 2004 to 2017

“…Permanent workers have more and better
Source: Englert (2017) benefits than us (part-time employees). The
first of their good benefits is that they have a
Wheredo
Where doprecarious
precarious workers’
workers’ households’
households’ incomes
incomes come from?
come from? straight basic salary while we earn according to
the hours allocated for the month… ”42.

4/10 precarious workers 2/10 supplement +2/10 are in households

are main breadwinners the main income where grants and
remittances are the The median income per person among precarious
main income
workers’ households is about R900 ($90) per month43.

42
Leri Nyula (not her real name), retail part-time worker (Pick ‘n Pay), 23 March 2017, Johannesburg.
43
Scully, B., 2016. From the shop floor to the kitchen table: the shifting centre of precarious workers’ politics in South Africa. Review of African Political Economy, 43(148),

64 Inequality Report 2020

B - Womxn at the margins Precarious work

The wage gap

PRECARIOUS
WORK:
THE WAGE GAP Median monthly Median monthly Median monthly Median monthly
earnings for earnings for earnings for earnings for
AND BARGAINING black women: black men: white women: white men:
POWER
R2500 R3250 R10,000 R13,100

Bargaining power

9.5 million 7 out are not covered by any

collective bargaining
workers, about of 10 agreement.

Inequality Report 2020 65

B - Womxn at the margins Precarious work

The Gig economy? - Watch this space

PRECARIOUS WORK: The gig economy, describes labour market activities whereby the demand for work is linked to the supply of work through digital
THE ‘FOURTH technology. The gig economy, which is not yet very big in South Africa, is another way in which changes in technology may
contribute to increasing inequality by undermining secure, protected work. In the gig economy, workers – for example, Uber
INDUSTRIAL REVOLUTION’ drivers – are supposed to see themselves as independent contractors. An app on a smartphone matches the drivers with riders
and Uber takes a portion of what the rider pays for each trip. Many drivers are attracted to Uber because it promises the freedom to
The so-called ‘fourth industrial revolution’ work when you choose without a boss breathing down your neck. But you are not as free as you feel: you are still required to meet
promises greater automation of work. (There targets set by Uber alone for the number of trips and customer ratings, which can lead drivers to drive at dangerous times, and
is a lot of debate about whether it is actually Uber decides alone on pricing and on the number of drivers, which affects how much competition there is for riders. The drivers
an ‘industrial revolution’ or simply increasing carry most of the risk: if your car gets smashed or hijacked while you are working, it’s not Uber’s problem. If there is a downturn in
automation within the ‘third industrial revolution’. the economy or a quiet month, you get less money, and if you’re sick it is on your own account.from accessing dignified work. For
instance, norms
According to the World Economic Forum, jobs
destroyed by automation are likely to be replaced The domestic work sector has also made advances in the area of the gig economy. There are 7000 domestic workers employed
by jobs created by automation: “The expectation in the gig economy by mainly two companies, Sweep and Domestic, in South Africa. This figure is about less than 1% of the total
emerging from the estimates of employers domestic worker labour force, which stands at 1 million workers. A study of South Africa’s only digital platform for domestic
surveyed for this report is that by 2022, structural workers, Sweep, shows that domestic workers face the same challenges as Uber drivers. The study highlighted some benefits e.g.
decline of certain types of jobs (10% decline) will flexi-hours, and workers tend to earn more, finding work easier. However, these benefits were often outnumbered by the costs.
While domestic workers on the platform can earn more than those not on the platform, the incomes are highly unstable because
be fully counterbalanced by job creation and the
the incomes earned by domestic workers are determined by the hours of work they have been able to obtain through the platform.
emergence of new professions (11% growth)44.
Many domestic workers on the platform complain that they experience changes in their income on a weekly basis based on the
However, the displaced workers are unlikely to number of hours they work. This leaves domestic workers on the platform nowhere because they still earn below the medium
enter the ‘new professions’ as it will often be national income that is at R3800 per month. Another drawback is that while the platform creates flexibility for domestic workers to
the least skilled workers who are displaced. It is work when they want to if opportunities are available, clients are empowered to cancel their appointments whenever they want.
estimated that occupations performed by 3 out This leaves domestic workers highly uncertain about when they will be booked next. Therefore, the nature of gig work is highly
of 10 South African workers – roughly 4.5 million insecure and inconsistent as gig workers are continuously adjusting to the available gigs.
people – could be automated in the near future. Because Uber drivers and domestic workers in the gig economy are not considered employees, they have no protection from
The occupations of another 2.6 million workers, labour law and they cannot ask for pension funds or maternity or paternity leave. For instance, Sweep and Uber do not need to
of whom 900 000 are employed as farmhands make contributions on behalf of the workers on their platforms. These workers are denied access to quality healthcare as they
and labourers, have an 80%-89% probability of are not afforded a medical plan (only 5 percent have a medical plan). Moreover, the majority workers (71 percent) that have either
being automatable45. a funeral plan or medical plan have to pay for it themselves. Only 7 percent of the domestic sector gig workers have pension
Technological changes in production schemes and these are not provided for by the platform.
processes tend to lead to the intensification In the same way as outsourcing puts a middleman employer between the worker and her real employer, the gig economy puts an
of work, increased surveillance of workers, the app or ‘platform’ between the worker and the people who profit from their work, but goes beyond outsourcing by depersonalising
restructuring of skills and the creation of a group the intermediary. This model, which is being tried out for food delivery, services and domestic work, reinforces existing inequalities:
of skilled workers that comprises a tiny minority rather than giving womxn a chance to break through the glass ceiling, a recent study of more than a million Uber drivers showed
of the total workforce. that womxn earn 7% less than men in the gig economy, even when doing the same work. The gig economy requires adapting and
creating innovative ways of organising.

44
World Economic Forum. 2018. Insight Report The Future of Jobs Report 2018 Centre for the New Economy and Society. http://www3.weforum.org/docs/WEF_Future_of_Jobs_2018.pdf
45
le Roux, D. Many jobs could soon be automated, and SA isn’t prepared. https://www.sun.ac.za/english/Lists/news/DispForm.aspx?ID=5767 p1
46
See, for example, Alois S. Mlambo FROM AN INDUSTRIAL POWERHOUSE TO A NATION OF VENDORS: OVER TWO DECADES OF ECONOMIC DECLINE AND DE-INDUSTRIALIATION IN ZIMBABWE1990-20151 [Department of Historical and Heritage Studies, University of Pretoria, South Africa

66 Inequality Report 2020

B - Womxn at the margins Precarious work

The colonial and apartheid economy of South Africa has always been defined, to a large
extent, by internal and external migrant labour from other southern African countries.
PRECARIOUS WORK: However, the new phase of migration to South Africa in the post-apartheid period is at
a time characterised by a general decline in South African industries, which has led to
The economic dominance of South Africa in southern Africa and in the rest intense competition between local workers and migrants from other African countries.
of the African continent, as well as the economic decline of the economies
of other African countries, are contributing factors to migration into South
Africa. Most migrants to South Africa come to Gauteng. Migrants are especially
vulnerable to precarious work.
Womxn migrants
In the southern African context, the ‘feminisation of migration’ - that is, the tendency
for more womxn to leave their countries to look for work in Johannesburg - and the
‘feminisation of work’, are linked to processes of worsening precarity and violence
against womxn.
False claims: “Immigrants are taking our jobs”
For example, the journey from Zimbabwe to South Africa to look for work presents visible
The total number of migrants in South Africa is estimated to be around 2 and invisible possibilities of being subjected to violence. Many womxn making the
million. Yet some 9 million people are unemployed in South Africa (including journey are raped, robbed, and humiliated by the authorities and members of the general
some immigrants). If every immigrant had a job to give to a South African, there public. When they arrive in Johannesburg, for example, they must deal with the difficult
would still be 7 million unemployed. Immigrants often take jobs that no-one questions that arise from being regarded as ‘illegals’, a term which further dehumanises
else wants. More importantly, it is actually big companies, from South Africa and criminalises them. When they eventually find work, they tend to be employed in
and other countries such as China, which stole hundreds of thousands of jobs precarious positions such as domestic workers, cleaners, waitresses and service workers.
from our neighbours as their exports crushed local industries. Manufacturing in The fact that they are generally not unionised increases their vulnerability, so that they
Zimbabwe is a case in point46. Instead of turning against immigrants, we need are victims of low wages and poor working conditions. Xenophobia in the workplace and
regional solidarity to reduce inequality. within the communities in which they live, makes them the most oppressed group within
the southern African borders.

Inequality Report 2020 67

B - Womxn at the margins Precarious work

1 3

Womxn’s participation in the labour market is Few companies take into account the safety
PRECARIOUS WORK: WORKPLACES shaped by the idea that they are best suited of womxn workers in getting to work and home
ARE UNFRIENDLY FOR WOMXN to the role of housework and care work, as we again. Night shift workers in particular are at
risk travelling in the dark, or they may end up
said earlier in the report:
There are additional obstacles to womxn in the workplace, sleeping on cardboard at work until the sun
especially black womxn, which increase inequality. • They are more likely to get jobs in lower rises, which is also bad for their health. Medical
paying industries that are considered studies prove that womxn shift workers are
womxn’s work, such as cleaning and most likely to contract breast cancer.
• Sexual harassment and rape at work and sex for jobs are catering and domestic work in private
both big problems for womxn entering work and staying homes.
at work: • Within other sectors they are more likely
4
to get jobs considered appropriate for Some kinds of work done mainly by womxn
This means that womxn have not clearly defined womxn, such as HR, receptionist, or are not considered work, in particular sex
legal recourse in these countries. The labour force painting arrows underground, which work, so it receives no protection.
participation rate for womxn aged from 25 to 54 is are often jobs with few possibilities
63% compared with 94% for men.47 for promotion.
• Womxn are passed up for promotion or not 5
• There is widespread violation of the rights of womxn workers, hired at all because it is assumed that
especially those who are regarded as precarious workers: their family responsibilities will interfere Since the end of apartheid, the largest and
with their work, but men with families do most organised unions tend to be in industries
not face the same prejudice. dominated by men. Well established unions
“[I] joined the strike voluntarily because we were all have been reluctant to organise amongst
demanding better working conditions and wages. We casual and outsourced workers because
were demanding maternity leave for pregnant women, 2 winning recognition is hard work, the workers
provident fund, and standard working hours. Casual have little protection in labour law, and the
and extra workers were working 6 to 6 (from 6 am to 6 Some workplaces do not have proper facilities
for womxn, such as separate change rooms or outcome is uncertain. These are often the
pm) Monday to Saturday with only one hour break per sectors with many womxn.
day and overtime was not remunerated”48. proper toilets.

47
UN Women. 2019. Facts and Figures: Economic Empowerment. http://www.unwomen.org/en/what-we-do/economic-empowerment/facts-and-figures
48
Nkosinathi Godfrey Zuma Supervisor: Prof. Bridget C. Kenny Title: ‘Contingent organisation’ on the East Rand: New labour formations organising outside of trade unions, CWAO and the workers’ Solidarity Committee. Wits, Johannesburg, 2015, http://wiredspace.wits.ac.za/bitstream/han
dle/10539/22795/Research

68 Inequality Report 2020

B - Womxn at the margins Precarious work

1 2 3 4

Employers tend to This prejudice manifests LGBTQ individuals are The discrimination has a
PRECARIOUS discriminate against LGBTQ itself at multiple levels. also more likely to face cost. In the case of wage
WORK: individuals for a variety LGBTQ womxn and men in unemployment. The
research shows that a
discrimination against
people who identify
of reasons. Scientists South Africa earn less on
WORKPLACES sometimes have colourful average than their gender- person is 9-20% more likely as LGBTQ, researchers
ARE names for these forms of conforming counterparts. to be unemployed if she or estimate the cost to be
discrimination, such as the The gap is significant, he identifies as LGBTQ in R2.54 billion per year;
UNFRIENDLY justification-suppression however, the gap between South Africa. and the estimate of the
FOR LGBTQ model, but they often boil men and womxn in general cost of underemployment
down to the fact that we is even worse. So the of people who face this
INDIVIDUALS live in societies that are pay gap between gender form of discrimination
heteronormative, meaning conforming and gender is R1.7 billion. Together
we tend to favour people non-conforming men is that is R3.24 billion lost to
who form heterosexual about 18%; and it can be wage discrimination and
relationships (that is, man has high as 35% between underemployment due
and women relationships) men and womxn. to discrimination.
over those who do not.

Inequality Report 2020 69

 B3
B - BWomxn
- Womxn at the
at the margins
Margins: Unpaid, Precarious, Formal and Informal Work Informal
Precarious Workwork

Informal
Work

70
Inequality Report 2020 Inequality Report 2020
70
 Number: Men Number: Women
Median earnings: Men (right axis) Median earnings: Women (right axis)
Unusually small
900 18 000 and not very lucrative
INFORMAL 800 16 000
• South Africa’s informal sector absorbs only
WORK 700 15 000 14 000 about 3 out of 10 non-agricultural workers,

Thousands of business owners

despite an unemployment rate above 25%

Monthly earnings in rand

600 12 000
The work done mainly by womxn in 11 000 11 000

the home South Africa’s informal

500
9 000
10 000 • India and Tanzania’s informal sector
9 000
sector is puzzling. In most low and 400 8 000 absorbs more than 7 out of 10 workers, and
medium income countries, the 300 6 000
7 500
6 000
unemployment rates are around 6% in these
informal sector is a major source 4 500
5 000
countries. Egypt and Mexico’s workers are
200 4 000
of employment, particularly for 3 500 more than 5 out of 10.
100 2 000
womxn. South Africa has one of the 2 000
Informal retail (selling) dominates the sector,
highest levels of unemployment in 0
along with services such as transport, hair-care
the world and a contributing factor African Coloured/ White African Coloured/ White
and child care.
Asian Asian
is the low level of participation in
the informal economy compared Formal Informal Incomes in the informal sector
to other countries, and womxn’s are low, especially for woman
participation in the sector is Incomes in the informal sector are
Medianespecially
low, incomes informal sector
for woman
declining. This makes the informal versus the formal sector by gender
sector small as a percentage of Median incomes informal sector
versus the formal sector by gender
the number of working age and Informal sector work is often only one component of a complex livelihood
unemployed people, compared strategy for many, and especially for womxn. Womxn often combine INFORMAL SECTOR FORMAL SECTOR

to other countries. Also, informal economic activities with unpaid reproductive work, and
informal work in South Africa is especially child care which further limits their prospects in the already WOMEN R1 516 R3 640
characterised by low incomes and structurally-constrained informal sector. This form of disadvantage is
low-productivity activities. made worse by the relative lack of quality social services, including child
care, health care, and education, which increases the burden of unpaid MEN R2 166 R5 000
labour that many womxn bear in households and communities (Alfers,
Lund, and Moussie, 2018).
TOTAL R2 000 R4 300

Source: Skinner and Rogan (2018)

B - Womxn at the margins Informal work

7 out of 10 “own-account” womxn who leave the informal sector

leave the labour market,

WOMXN
A volatile sector
compared to 5 out of 10 men.
Almost four out of five individuals who were in the informal In summarising this chapter, though
sector in 2014 (78%) had left the sector within 3 years. This MEN racial and class inequalities in
follows the economic crisis in 2011 but the trend was even South Africa are well known, gender
faster in 2008 before the crisis (82% left within 3 years.) inequalities overlap and underpin
Nearly 3 out of 10 men who leave take a ‘step up’ into activities that are
those racial and class inequalities.
probably better (such as formal self-employment, informal or formal wage
Womxn were forced to take up certain
work), compared to fewer than 2 out of 10 womxn.
Womxn’s participation in the sector has been declining while men’s roles in the care economy, and the
participation continues to rise: Source: Top - Skinner and Rogan (2018); and bottom - Fourie (2018) informal economy as a direct result
of the policy which was designed
So the small size of the informal sector is not because people are leaving by the apartheid-era to push black
In 2008 nearly 6 out of 10 womxn working in the informal economy for something better. The decline of retail has not been matched by an
were own-account workers South Africans to work in the mines.
increase in higher income sections of the informal sector. While there was These structures still exist to a large
an increase in informal construction, the portion of informal firms i nvolved extent, and they manifest themselves
in manufacturing has declined between 2001 and 2013, from 9.3% to in the fact that womxn still do much
7.6% (Fourie, 2018, p. 115). Over the same period, “Community and Social more unpaid care work than men.
WOMXN By 2014 this had declined to about 5 out of 10. Services”- low income activities such as child care and hairdressing - Womxn are more likely to work in the
increased from 6% to 12% (ibid). The graphs on page 40 (Changes in gender informal economy, although their
and employment status) suggest that men’s increasing participation in the numbers are in decline as men now
informal sector is a mirror for their falling participation in formal waged work. dominate the sector since the Global
Financial Crisis. When womxn do
Almost 3 out of 10 self-employed people in the informal sector The position of women in the informal sector has declined in recent years
have access to more formal work it
were selling food in 2008. % of employed men and women % of employed men and women is usually precarious work, meaning
working in the informal sector working in the informal sector
it is usually underpaid, dangerous,
short-term and where womxn may
18.5% 18.5%
60.5%
be subjected to sexual harassment.
Only 2 out of 10 were selling food in 2014. 46.2% LGBTQ individuals face discrimination
17.5%
that leads them to be more likely to
14.7%
face poverty than gender conforming
individuals. These issues can be
2008 2014 2001 2014 addressed if the South African
Where do people go when they leave the informal sector? Men Women government takes steps to better
recognize, reduce and redistribute
Most leave the labour market entirely, and they stop looking for work. unpaid care work; ensuring the rights
Source for Graph (above) “The position of womxn in the informal sector”: Sources:
Top: Rogan, M., & Skinner, C. (2018). The size and structure of the South African of womxn who work in the informal
7 out of 10 “own-account” womxn who leave the informal sector informal sector: A labour-force analysis. In F. Fourie (Ed.), The South African Informal sector, including their right to access
leave the labour market, Sector (pp. 77–102). Cape Town: HSRC Press. Bottom: Fourie, F. (2018). Informal their potential customers; and take
Sector Employment in South Africa: An enterprise analysis using the SESE survey. steps to regularise precarious work.
WOMXN In F. Fourie (Ed.), The South African Informal Sector (pp. 103–150). Cape Town:
HSRC Press.
compared to 5 out of 10 men.

MEN

72 Inequality Report 2020

C
C - What is behind classist, gendered & racialised labour inequality in South Africa?

What is behind
classist, gendered
& racialised labour
market inequality
in South Africa?

Inequality Report 2020 73

C - What is behind classist, gendered & racialised labour inequality in South Africa?

C1 What is the Minerals Energy Complex? Pg 76

C2 The Financialised Minerals and Energy Complex Pg 80

C3 The Historical Origins of the Financialised MEC Pg 87

C4 Economic Reform since 1994 Pg 94

C5 Other Social Impacts of Financialised MEC Pg 101

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C - What is behind classist, gendered & racialised labour inequality in South Africa?

What is behind classist, gendered &

racialised labour market inequality
in South Africa?
Structure:
Indeed, the chronic under provisioning of universal, and patriarchal social norms that have been long in the making. We focus
To understand what the structure in this chapter on the manner in which our economy is structured as a key
of the economy is we need to accessible and quality public services such as
driver of a classist, gendered, and racialised labour market inequality.
understand the immediate causes
and the underlying causes of a
education and healthcare is much to blame for
The outline of the chapter is such that it begins by defining South Africa’s
problem. To illustrate: if your roof deepening labour market inequalities.
leaks during a storm, you could say dominant economic structure, the Minerals Energy Complex (MEC) and
the storm caused your roof to leak. Oxfam’s 2019 Public Good versus Private Good report reveals that the demonstrates its gendered and class nature (section C.1). This is followed
But if the roof had a hole in it before
the storm, then the storm was the provision of universal, accessible and quality public services, particularly by a discussion on the financialisation and neoliberalisation of the MEC
immediate cause of the leak, but education, health and social protection reduces inequality by 13%. and its impact on economic and gendered inequality (section C.2), which is
the structure of the roof which had a
However, it is also true that the manner in which the economy is structured followed by a discussion on the historical roots of the MEC (section C.3), and
hole in it was the underlying cause.
So it is essential to understand (see below definition) does not ensure that many of the semi-skilled or then a further look into how to survive post-apartheid South Africa through
underlying causes. Why then should “unskilled” seeking employment in the formal and informal sector will gain the economic reforms implemented by the government and its impact on
we even mention immediate causes?
Often, the immediate causes are
employment that is dignified. We have seen that especially more black labour and the informal sector (section C.4); wherein the last section of the
the way in which people experience womxn are placed right at the bottom of the sticky floors of inequality. chapter will draw on other social impacts of the financialised MEC.
the underlying causes. Also, the They are the most likely to be unemployed and/or to be employed in
immediate causes may expose the
underlying causes – i. e. you did not underpaid insecure service sector jobs. The economic model that shapes
know your roof had a hole until the the structure of the economy reinforces and worsens the classist, racist
storm hit.

Inequality Report 2020 75

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C - What is behind classist, gendered & racialised labour inequality in South Africa? What is the Minerals Energy Complex?

What is
the Minerals
Energy Complex?

76 Inequality Report 2020

 C - What is behind classist, gendered & racialised labour inequality in South Africa? What is the Minerals Energy Complex?

What is the Minerals

Energy Complex?
Intermediate outputs/inputs: The manufacturing sector is important to a country’s economic class relations and class conflicts and how these show up in gathering
Goods or services produced to development because it has special features. The special features include wealth and capital (called accumulation by economists), in the repeating
be used in further production,
activities that are able to produce a lot of value for the economy and society, cycles which drive the economy (economic reproduction), and in the
such as raw gold or energy.
which helps the economy to grow. Many countries around the world that structures that keep social inequality alive from one generation to the
have succeeded in growing their economies and employing people in a next (social reproduction).
sustained manner have done so by investing in their manufacturing sectors, It is worth noting that the MEC has stuck together throughout the four
especially manufacturing activities that require a lot of workers i.e. labour decades since 1970.
intensive (e.g. China). The manufacturing sector also relies on accessible
and quality services in order to generate its value. Services that are part
of what is known as the care economy such as healthcare and education,
as well as services that facilitate transactions such as communication,
In 2010, almost 70% more than half (56%)
of inputs of intermediate
wholesale and retail, transport and financial services, are crucial to a well
necessary for production in the output
-functioning manufacturing sector and economy. Services in the care
MEC sectors came from the MEC- from MEC sectors goes back into
economy contribute to the development of a strong work force that has core itself the MEC core as inputs.
the capabilities that are required to carry out the functions required.
South Africa’s economy is dominated by large-scale mining (minerals),
energy production which supports mining (such as Sasol and Eskom) and By contrast, only one quarter (25%) of intermediate inputs into non-MEC
financial sector. Their domination of the economy is called the Minerals manufacturing sectors come from the MEC and only 10% of intermediate
Energy Complex (MEC). The minerals-energy-complex (MEC) was the output from non-MEC sectors enters into the MEC sectors as inputs.
name put forward by Fine and Rustomjee to describe historical industrial Concentration was especially dramatic in manufacturing activities.
development in South Africa. The MEC describes the process of economic Fedderke and Szalontai (2009) wrote that ‘by the 1990s, there is no
development special to South Africa’s political economy. It is an analysis of manufacturing sector in which 5% of the firms do not produce at least
industrial development that focuses on the interdependence of different 50% of total output’ (p. 6).
economic power elites, industrial sectors and the state. It emphasises

49
Fine, B and Rustomjee, Z. (1996). The political economy of South Africa: From minerals energy complex to industrialisation, Johannesburg: Witwatersrand University Press

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Table 1 The MEC core identified

The Gendered and Class Dimensions
through material linkages50
of the MEC and Non MEC sectors

MEC subsector Share of inputs Share of output The MEC and non-MEC manufacturing sectors are also extremely gendered.
from MEC to MEC sectors The diagrams below show the employment and medium pay for all workers
sectors (% of (% of total in manufacturing industries and the other looks at employment by gender
total inputs) outputs)
and race in the services sector. These diagrams overall tell the story that
Coal mining 26 90 male workers (especially black men) generally dominate the manufacturing
sector in numbers; while womxn dominate about half the services sector
Gold and uranium ore mining 55 5
in numbers. MEC manufacturing sectors are paid more than non-MEC
Other mining* 23 77 manufacturing sectors. What is striking is that womxn working in the
manufacturing sector are mostly in non MEC manufacturing sectors such
Coke (the coal product, as clothing and textiles and processed foods. Moreover, when womxn enter
not the drink) and refined 88 18
petroleum products the manufacturing sector, they are often posted as cleaners. The clothing
and textiles sector, a manufacturing sector dominated by black womxn
Basic chemicals 77 60
in numbers, is also amongst the least paid manufacturing sectors. In the
Other chemicals and services sector, womxn sectors linked to the care economy: education,
67 37
man-made fibres
community and personal services (mostly domestic work) and healthcare.
Plastic products 68 30
These sector activities and pay differentials could be said to copy the
Non-metallic minerals 73 8
sexist cultural norms and attitudes that dictate that womxn’s work is not
Basic iron and steel 82 59 productive so it has no value; and is meant for taking care of the work force.
Therefore, patriarchy is at the root of this economic structure. Patriarchy
Basic non-ferrous metals 91 59 is a system of oppression that enforces male dominance over womxn
Metal products excluding and non-binary people. Through systematic and institutionalized gender
70 41
machinery oppression, it exploits and subjugates womxn within both the private
Machinery and equipment 63 53 sphere and public realm. Patriarchal social norms also mean that care is
considered a womxn’s natural role and a womxn’s duty to provide, rather
Electricity gas and steam 53 47 than it being a shared responsibility between men and womxn and/ or the
Non-MEC manufacturing 23 6 state’s responsibility to provide.

50
Susan Newman’s calculations; Data source: Quantec Input-Output tables 2011

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 C - What is behind classist, gendered & racialised labour inequality in South Africa? What is the Minerals Energy Complex?

Women’s employment and median pay for all workers in manufacturing industries, 2016 Employment in services by gender and race, 2016
Women White Women Coloured or Asian Women African Women African Women Coloured or Asian Women White
Men White Men Coloured or Asian Men African Men African Men Coloured or Asian Men White
Median icome (right axis) Median icome (right axis)

300 000 10 000 1200 000 80%

75%
9 000 9 000 70% 70%
67%

Monthly income in rand

250 000 8 000 1000 000
Number Employed

7 500 57%
60% 60%
7 000
200 000 800 000 50%
5 633
6 066 6 000 46%
5 200 5 200 44% 44%
150 000 4 700 5 000 600 000 37%
40%
4 500 4 333 4 550
4 000 34%
3 640
3 400 27% 30%
100 000 3 000 400 000
2 800 19%
3 033 2 773 20%
2 000
50 000 200 000 10%
1 000
- - 0%
CTFL

Food

plastic, rubber
Other checmicals,

publishing
Printing and

Metals

Wood and paper

Beverages

equipment
Transport

metallic minerals
Glass and non-

capital equipment
Machinery and

electronics
Applianced and

basic cehmicals
Petroleum and

Recycling

Furniture

excl motors
Electrical equipment

Education

and personal
Other community

Health

(largely security)
Other business

Financial

government
General

Legal

State Security

Real Estate

ICT support

Architecture

Advertising
Source: Labour Market Dynamics, 2016. Downloaded from Stats SA http://www.statssa.gov.za/ in September 2018

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C - What is behind classist, gendered & racialised labour inequality in South Africa? The Financialised Minerals and Energy Complex

The Financialised
Minerals and
Energy Complex

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C - What is behind classist, gendered & racialised labour inequality in South Africa? The Financialised Minerals and Energy Complex

The Financialised Minerals their activities, such as clothing stores offering credit cards to
their customers.
and Energy Complex What is wrong with financialisation?
We can see financialisation in a lot of recent unbundling
The financial sector has also become more important in the complex as
and downsizing, where big conglomerates (see glossary for
financialisation takes hold. (Financialisation, which we have nicknamed
explanation) sell off their ‘non-core’ businesses (that is,
‘The Mashonisa Economy’, is defined in the box below.
businesses that generate the least money) (while retaining
controlling shares in some of them) and outsource very large parts
of their operations. Sometimes, all that is left after unbundling is
Definitions a company of managers managing investments and paying out
shareholders. An aspect of financialisation is that investors expect
What is financialisation? uMashonisa omkhulu we-
ever increasing returns on their money, which in turn encourages
economy short-term investments, where investors pour money into, let
Financialisation refers to ways in which finance has become us say, companies providing housing loans when the housing
more and more powerful in shaping the economy and our lives. market is rising, and then pull their money out at the first sign of
In businesses, more and more investment becomes about just collapse to put it somewhere else. This makes economies very
making money for shareholders, rather than investing in making unstable. Another problem with financialisation is that it diverts
a physical thing or providing a tangible service. Banks and the investment away from productive activities. It also intrudes right
likes of mashonisa have always made money directly from the down into our everyday life, where provision of basic needs must
money given to lenders by charging interest on loans; but with now depend on financial markets: important safety nets such
financialisation, this expectation is becoming more widespread as pension funds are getting into risky investments, and even
and more and more of our everyday activities are financed by our social grant pay-outs are managed by companies expecting
credit. Speculation is like taking a bet on the performance of a to make money out of people who are otherwise ‘unbankable’
share price (which means looking ahead, from the same word that by processing the grants through bank accounts created only
gives us spectacles) is another example that has a long history, for that purpose, leading to the social grants payment crisis in
where traders on the stock and commodity exchanges would 2018. Financialisation also further increases the advantage of
gamble on the future prices, company shares or commodities like big corporations over small businesses, because it is easier for
oil or minerals. With financialisation, however, even companies them to get credit as they are considered less risky, and there is
that are not banks turn away from productive activities towards more money ‘looking’ for sure-fire returns.
purely financial investment, or find other ways to financialise

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 C - What is behind classist, gendered & racialised labour inequality in South Africa? The Financialised Minerals and Energy Complex

There are a variety of ways that indicate that the South African economy crucial benefit of these types of investments is that they have the potential
has become increasingly financialised. The figure below shows just how to increase employment and incomes which is inequality reducing.
much the economy has been financialised through the amount invested
The green bar shows purchases made in short term investments (that is,
in short investments over long term investments over time.
net portfolio financial assets) discussed in the box above. These types of
investments do not raise employment and incomes therefore they are not
400000 inequality reducing, instead they are inequality enhancing as they benefit
the owners of these investments.
R Millions (2005 prices)

200000 The height of the bars shows us the amount of money in millions of Rands
that was invested in either short term or long term investments each year.
The amount of money that was spent is shown from the numbers on the
0
left-hand side of the chart that go from minus R150 billion to R250 billion.
1970
1972
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
The years in which those amounts of money were spent are captured by
-200000 the numbers at the bottom of each bar chart, from the year 1970 to the
Net Capital Net Acquisition Net financial year 2008. The millions of Rands are adjusted to 2005 prices, which means
Formation of financial assets investment
that they are showing what the figures would be if there was no inflation.
This allows us to make a proper comparison from one year to the next.
How to read the bar chart:
What this chart tells us: The chart shows that financialisation of the
The maroon bar shows the investments in plants, machinery, and buildings South African economy had already taken hold by the mid-1980s as short
(that is, net capital formation) that businesses purchase for the running of term investments (that is, net portfolio financial assets) have been rising
their operations. These investments are long term investments because ever since beyond long term investments. Therefore, as the economy
the rewards from these investments are enjoyed over a long-time horizon has become financialised, the economy’s growth and development has
because once purchased they take a long time to be sold. Moreover, the become increasingly reliant on unstable forms of investments.
Figure 18. Net annual capital formation, acquisition of financial assets and financial investment by non-financial corporations in South Africa: 1970-
201051

51
Data source: Flow-of-funds tables, SARB 2011

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 C - What is behind classist, gendered & racialised labour inequality in South Africa? The Financialised Minerals and Energy Complex

The graph above tracks investment in different sectors of the Each colour shows a different sector. Pink shows investment directly
South African economy from 1970 until 2016. Investment in the in the MEC itself (Mining and energy). The blue line is investment in the
MEC and finance has grown steadily while investment in non MEC MEC including investment in transport and storage for the MEC. Orange
manufacturing has not 52 shows investment in manufacturing heavily linked to mining, such as
chemicals used to separate minerals from the ore and to make explosives
for blasting. (Table 12: The MEC core identified through material linkages
300000
on page 74 lists these sectors.) Green shows investment in finance and
R millions (constant 2010-prices) 250000 business services (for example banking itself and services like IT) and
blue shows investment in manufacturing that had nothing to do with the
200000 MEC (such as clothes, washing machines, etc.). The maroon is all non-MEC
manufacturing and the purple shows non-MEC manufacturing if you take
150000
out motor vehicles and their parts.
100000 So for example we can see that total investment in the MEC has grown
from around R68 billion (=R68000 million) in 1984 to R177 billion (R177000
50000
million) in 2016.
0
What the graph tells us: The graph shows that investment in the MEC (orange
1970
1972
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2011
2014
2016
and grey lines) has increased faster than investment in any other sector.
Investment in manufacturing, even manufacturing for the MEC, (light blue,
MEC inc. transport & storage MEC MEC manufacturing dark blue and green lines) has gone up and down but overall, it has stayed
quite flat. Not much more is being invested in manufacturing now than in
Finance & business Non-MEC Non-MEC manufacturing
manufacturing excluding motor vehicles the 70s, whereas investment in the MEC has been growing steadily. The
and parts fact that MEC investment including transport and storage (grey line) has
increased still more than MEC investment is probably related to the fact
How to read the graph: that more is being done to facilitate the export of minerals. We can also
see financialisation in this graph, as the yellow line has also risen, and
Each dot on the graph shows how many million Rands (the figures from top
even though it fell in 2008 due to the global financial crash, it still remains
to bottom on the left hand side of the graph) were invested in each year
some way above the green and blue lines (manufacturing).
(the figures running left to right at the bottom of the graph). The millions
of rands are adjusted to 2010 prices, which means that they are showing In other words the graph tells us that the skewed structure of the South
what the figures would be if there was no inflation. This allows us to make African economy during apartheid has been emphasized rather than
a proper comparison from one year to the next. corrected in the years after the end of apartheid.

52
Susan Newman’s calculations; Data source: Quantec

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How the Financialised Minerals and Energy
Complex drives economic and gendered inequality

Definitions a Conglomerates centred on mining, energy and finance (The financialised but implementing industrial policy on labour intensive manufacturing
conglomerate: MEC) began to dominate the economy during apartheid. The state is was weak in practice, while the focus on the needs of capital intensive,
directly involved in the MEC, through energy production, such as Eskom, highly influential industries – the MEC conglomerates – was strong in
A large company
and some manufacturing and services are also within the MEC core. policy and in practice. This contributed to deindustrialisation, leading to
composed of a number of
a decline in manufacturing jobs which in turn fed unemployment and also
other companies, often
The MEC is capital intensive, meaning it relies on a lot of machinery and fed the recession (where the economy – production and trade – shrinks).
from various sectors, eg.
equipment relative to the number of workers it needs. This is called During the recession, a lot of investment was withdrawn (outflows) in the
Rupert’s Remgro group
capital intensive. climate of short-term investment associated with financialisation. Short
started off producing
term investment does not help to build a strong economy. It takes a long
cigarettes but now owns It is commodity based – centred on extracting raw materials, such as time in resources, effort and patience to raise a child into an adult, and
controlling shares in food minerals, which are sold as they are without further work being done on similarly, to build an economy with a good structure that can create jobs
producers, medical aids, them. (For example gold is a commodity; gold jewellery is not). and growth takes patience, long term investments. This is the type of
equipment manufacturers
investments where rewards are a long time coming, but sustained over
and insurance. Overall, the manufacturing and services sectors are more labour intensive the long term. An economy with a poor structure attracting short term
that the MEC. This means that they use a lot of workers compared to the investment is vulnerable to crisis and job destruction. While short term
amount of equipment and machinery investment required. These sectors investments create quick wins in a short time, they are not sustainable.
are usually much more labour intensive. They use a lot of workers compared
to the amount of equipment and machinery investment required. But very
large companies and conglomerates also dominate the market in these
False Solutions: Neoliberal wisdom was all about trickle-down
sectors. Because of the dominance of big companies, the informal sector
economics: according to this thinking, if you let business have its
in South Africa, which is mainly in services (retail, hairdressing, etc.), is
way, let the ‘free market’ rip, and allowed the rich to get richer, the
very small.
economy would expand, creating jobs and new opportunities for
Around the time that apartheid was ending, neoliberalism (which is defined everyone else. This included ‘deregulation’ – removing rules and
in the box False Solutions) came to dominate thinking about economics regulations on business, ranging from tariff barriers to controls
amongst global elites composed of politicians and captains of business. on exporting profits to workers’ rights - and the idea that the
Neoliberal thinking strongly influenced state policy under the ANC, which state should not spend much – hence privatisation, cutting back
was captured by this so called ‘Washington consensus’ early on. Later government funding for healthcare and unemployed support in
policy intended to encourage labour intensive manufacturing growth, those countries which had it – or limiting the introduction of such
 C - What is behind classist, gendered & racialised labour inequality in South Africa? The Financialised Minerals and Energy Complex

things here – in order to reduce taxes on companies and leaving international manufacturers which were making, for example, exhaust
job creation to the whims of the market. By the time the ANC came filters for cars. The increased demand, alongside some clever stockpiling
to power, the RDP was already being elbowed out to make room for by the mining companies, pushed up the prices of commodities such as
GEAR, which produced jobless growth and redistribution upwards, platinum, leading to the commodity boom, which cemented the state’s
from workers to the very rich. Since then, the pale attempts to commitment to the MEC because it looked like this part of the economy
provide social support, such as the social grants, have always held the most promise for growth. However, the commodity boom actually
taken a back seat to the needs of the conglomerates. Of course further weakened our economy by encouraging short term inflows and
a free market is not free for all when some players are elephants outflows: international shareholders were looking for places to invest their
and others are ants. Neoliberalism simply opened the way for the money where the returns were high, and South Africa’s mines still had very
giant players to get into every nook and cranny of the world’s low wages by international standards which made the returns bigger; this
economies, with devastating effects on the general population. investment flowing in in worked as an outflow overall because the profits
were paid out to shareholders in other parts of the world. The commodity
boom in the context of transnationalisation of mining companies thus
also ensured further deindustrialisation: before neoliberalism, controls
The underbelly of neoliberalism was intensified financialisation (defined on exporting capital would have forced the big conglomerates to look for
on p70 above), which contributed to asset price inflation – that is, an local opportunities invest their profits.
increase in the price of bonds, shares, land property and the like – as The outflows of profits are not always legal, they have also been illegal
international investors bought up such assets short term in order to (or what is defined as illicit financial flows). According to the African Union
sell them for profit. This tendency of short term investment, leading to high level panel on illicit financial flows (Mbeki Panel), 4% of the South
rapid inflows and outflows of investment, made the recession worse as African GDP was lost every year on average between 1970 and 2008, this
investors pull their money out quickly when things start to go wrong, and represents over the period US81.8bn (~R1145 billion53). In today’s terms,
asset price inflation contributed to the recession because it made it harder this trend of 4% of GDP would mean R216.5 billion for the 2019/20 budget
for anyone to buy into the inflated asset market to get things going again. year. The mining sector is the biggest culprit of illicit financial flows in
Meanwhile, neoliberalism allowed the mining conglomerates, in particular, South Africa due to high levels of foreign currency it brings to the country.
to outgrow South Africa and become increasingly transnational, so that Digital giants such as apple, Google, etc. operate remotely. Therefore,
they were able to export their profits (outflows) instead of investing them it is extremely easy for them to artificially (for tax purposes) delegate
locally. And although the price of gold, Apartheid’s backbone, had taken a their tax functions to subsidiaries companies located in offshore low tax
dive, worldwide demand for minerals such as platinum increased amongst jurisdictions the role of final service providers to customers.

53
For 1 USD = 14 rands, inflation not taken into account

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C - What is behind classist, gendered & racialised labour inequality in South Africa? The Financialised Minerals and Energy Complex

However, this does not account for tax evasion practiced by individuals We have not shown in this diagram all the other ways that this set up
and tax avoidance schemes used by multinationals to ‘legally’ bypass contributes indirectly to inequality by giving rise to the five lows: low
South African tax laws. It also does not take into account the ripple effect investment, low productivity (of the economy, not of workers), low wages,
these losses have on the economy in general under what the AIDC call low levels of employment (=high unemployment) and low levels of social
wage evasion (See Tax and Wage Evasion - A South African Guide53). In support from the state. We will come to some more specific drivers of
other words, illicit financial flows have a massive impact in eroding the inequality under the MEC a bit later in the report.
South African tax base, both in the long and short term. This in turn has
The diagram also does not show the politics which enabled the MEC to keep
led the South African government to reverse the progressivity of the South
the upper hand, namely the centralisation of authority with the presidency
African tax system by increasing indirect taxation in 2018, and to a growing
and the treasury under Mandela and Mbeki, and its subsequent abuse and
pile of public debt which future generations will have to deal with. [Turn
restoration in a context where politicians had become accustomed to being
to p96-97 for more on government’s reverse of the progressivity of the
courted and persuaded by captains of industry since the ‘Washington
tax base]
consensus’ took hold, while the Triple Alliance held opposition from the
As a result of all of this, the South African economy overall suffers from unions tightly leashed.
uneven investment and low fixed investment.
The next section gives us more information about the origins of the MEC
In recent years, therefore, employment has grown only in the low-wage economy came about and how it survived the end of apartheid.
services sector, while profits have skyrocketed for CEOs in the MEC. This
is the most direct way in which the MEC-skewed economy has sustained
and intensified inequality.

53
Read the full document here: http://aidc.org.za/download/taxation/Tax-Evasion-and-South-Africa-Final-version-24.04.2019-00000003.pdf

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The Historical
Origins of the
Financialised MEC

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C - What is behind classist, gendered & racialised labour inequality in South Africa? The Historical Origins of the Financialised MEC

The Historical Origins

of the Financialised MEC
Dispossession by the Market crushes the emergence The inequality produced by the market is a feature of the structure of South
of Black Business Africa’s economy which had persisted from the colonial and Apartheid
eras and into the present.
Inequality in South Africa today is an outcome of the dispossession of

“
the black majority that took place throughout the colonial and apartheid In the late 19th century, growing populations and the emergence of
eras. In addition to the direct theft of land, cattle, and other assets, there towns and cities around the mining areas of the interior led to increased
was a significant degree of “indirect” dispossession through the market. opportunities for African agricultural producers. In response to these
The state aimed to curtail This was accomplished, first, through restrictions put on black people’s opportunities, there emerged a successful and differentiated class of
the growth of the black participation in various economic activities, such as the Group Areas black peasant-commercial farmers (Bundy, 1988).
commercial farming class Act limiting residence and business activities by black people in areas The state aimed to curtail the growth of the black commercial farming
through a series of laws, one designated for white people. Second, state-aligned white-owned formal
of the most important of which
class through a series of laws, one of the most important of which was
enterprises were given a range of advantages over small black-owned the 1913 Native Land Act. This act restricted African ownership of land
was the 1913 Native Land Act.
and informal enterprises, including state support, finance, and access to outside of the small ‘Native Reserves’ and limited the development of land
This act restricted African
ownership of land outside of key social and business networks. markets even within the reserves.
the small ‘Native Reserves’ This resulted in the transfer of wealth and market share through
and limited the development In addition to dispossessing those who owned land outside the reserves,
of land markets even within
the reserves.
“ “market mechanisms”, rather than through more direct and overt forms
of dispossession. Yet they played such an important role shaping the
structure of wealth and power in the South African economy that they
the Land Act “had important implications for the population within the
reserves. By preventing the most straightforward form of accumulation
open to successful black peasants, namely expanding the land under
can be considered forms of dispossession in their own right. The goal was cultivation, it sought to apply the brakes” to their development (Bundy,
not only to advantage formal capitalist enterprises in the market. It also 1988, p. 213). This ‘brake’ not only prevented the successful expansion of
aimed to turn black communities into sources of labour supply. Successful commercial agriculture, but a whole range of other business opportunities
business activity by black people would give them an alternative to beyond the reserves. This limitation on the economic opportunities of
wage labour. Therefore, policy for much of the 19th and 20th centuries rural residents was further reinforced by legalized racial discrimination in
not only ignored, but actively discouraged the development of a viable education and the labour market.
class of business owners among black South Africans, both in rural and
urban areas.

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One of the few remaining opportunities available to black entrepreneurs African womxn brewers were also indirectly disadvantages through a
was retail trading, but, as Southall notes “even within the commercial restructuring of the market for beer. In 1937, national legislation was passed
sphere, African activity was subject to severe limitations, and historically, that allowed the establishment of municipal monopolies on the brewing
white dominance in trading and retail was continuously guaranteed by a and sales of sorghum beer. Over the next few decades the municipal beer
system of protective licensing from the early years of the century, if not halls became a major source of revenue for local governments across the
before” (Hart, 1972, p. 95). country. And municipalities protected their lucrative legal monopolies
with greatly increased repression of “illegal” African womxn brewers.
Such regulations served to protect the established position of white
According to Bonner (1990), in 1936, out of 344,710 convictions against
traders in rural areas who had been well-established by the beginning of
black people in the entire country, 107,348 were for liquor related offenses.
the 20th century. Protest from black traders in the Transkei eventually led
By comparison, Pass Law offenses in the same year numbered 71,052.
to the space monopoly being limited to two miles, but even this restriction
was widely seen by black residents of rural areas as limiting opportunities.
By the time this restriction was removed in 1964 by the Transkei legislature
in its first session (ibid, p. 96), already-established white traders were in Khawuleza Mama Jonga jonga jonga yo Iyooo amapolis’
Khawuleza Mam khawuleza Mama, iyeyiye azongen’endlini Mama,
an advantageous position. Mama Patti, khawuleza Mama
Khawuleza Mama
African traders on the Witwatersrand in the first half of the 20th century Khawuleza Mama Humm, Patti, jonga jonga Jonga jonga jonga yo
were restricted from “dealing in anything but the bare necessities, such Khawuleza Mama She Shi jonga yo khawuleza Mama khawuleza Mama, iyeyiye
Za Wo Iyeyiye Mama Mama
as tea, sugar, coffee and tinned meat et cetera” (Southall, 1980, p. 43).
Khawuleza, Patti, jonga
In the 1930s there were increasing levels of migration to the Witwatersrand, jonga jonga yo khawuleza
Naaaank’ amapolis’ Ooooooy Mama
including by womxn. Womxn were legally restricted from virtually all forms azongen’endlini Mama,
of wage work, from the mines to domestic service. Beer brewing and sales Patti, Khawuleza Mama Iyeyiye Mama
were amongst the few profitable activities open to womxn in the urban Naaaaaaak’ amapolis’
Naaaank’ amapolis’ azongen’endlini Mama,
areas (Bonner, 1990). Womxn brewers faced continual police raids and azongen’endlini Mama, Patti, khawuleza Mama
Patti, She Shi Za Wo
harassment by authorities who aimed to prevent urbanization by cutting
off this source of urban income. - Miriam Makeba: Khawuleza

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In 1962 laws that prohibited the sale of “European Liquor”, including white dominance in trading and retail was continuously guaranteed by a
lager beer, to black people were repealed. In the decades that followed system of protective licensing from the early years of the century, if not
South African Breweries, already established as a dominant player in the before” (Hart, 1972, p. 95).
local lager beer market, used its position to solidify its near monopoly in
Such regulations served to protect the established position of white
the beer industry as a whole. It was even able to capture the market in
traders in rural areas who had been well-established by the beginning of
townships and among urban black residents, eventually displacing the

“
the 20th century. Protest from black traders in the Transkei eventually led
municipal beer halls which continued to sell sorghum beer (Mager, 1999,
to the space monopoly being limited to two miles, but even this restriction
2008; Rogerson, 1986a). The growth of SAB did provide some opportunities
was widely seen by black residents of rural areas as limiting opportunities.
for informal enterprises, especially shebeens, which were a major market
African traders on the By the time this restriction was removed in 1964 by the Transkei legislature
for SAB’s products (Rogerson, 1986b).
Witwatersrand in the first in its first session (ibid, p. 96), already-established white traders were in
half of the 20th century This provides an example of how the structure of the economy is skewed an advantageous position.
were restricted from in favour of large formal businesses. SAB was able to monopolise the
“dealing in anything but African traders on the Witwatersrand in the first half of the 20th century
higher-value activity of production, while it left the lower-profit and legally
the bare necessities, such were restricted from “dealing in anything but the bare necessities, such
risky activity of selling beer to black township residents and a network of
as tea, sugar, coffee and as tea, sugar, coffee and tinned meat et cetera” (Southall, 1980, p. 43).
tinned meat et cetera”
informal enterprises.
(Southall, 1980, p. 43).
“ These examples contradict the idea that the small size of the informal
economy today is the result of some natural or cultural disinclination
In the 1930s there were increasing levels of migration to the Witwatersrand,
including by womxn. Womxn were legally restricted from virtually all forms
of wage work, from the mines to domestic service. Beer brewing and sales
towards entrepreneurship among black South Africans.
were amongst the few profitable activities open to womxn in the urban
Indeed, black South Africans have historically proven to be responsive areas (Bonner, 1990). Womxn brewers faced continual police raids and
to market opportunities and innovative in the ways that they carve out harassment by authorities who aimed to prevent urbanization by cutting
livelihoods from them even in the face of legal restrictions. off this source of urban income.
One of the few remaining opportunities available to black entrepreneurs African womxn brewers were also indirectly disadvantages through a
was retail trading, but, as Southall notes “even within the commercial restructuring of the market for beer. In 1937, national legislation was passed
sphere, African activity was subject to severe limitations, and historically, that allowed the establishment of municipal monopolies on the brewing

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and sales of sorghum beer. Over the next few decades the municipal beer to leave behind their wives and families in what were called reserves.
halls became a major source of revenue for local governments across the These were depressed areas, later known as Bantustans. The cheap
country. And municipalities protected their lucrative legal monopolies black labour system exploited black men, who lived in poorly-constructed
with greatly increased repression of “illegal” African womxn brewers. hostels in the cities and earned very low wages. In addition, violence and

“
According to Bonner (1990), in 1936, out of 344,710 convictions against surveillance by the employers and the racist state security forces created
black people in the entire country, 107,348 were for liquor related offenses. slave-like conditions for these workers, who also faced the danger of mine
By comparison, Pass Law offenses in the same year numbered 71,052. work. On the other hand, white workers who came to South Africa from the
But the discovery of gold
Global North during the post-war years with a tradition of organising were intensified the migrant labour
Dispossession of Black male labour for MEC able to bargain for exclusive rights and privileges like those of workers in system. Taxes were introduced
and commercial farming their countries of origin. by colonial governments
The discovery of gold in what is now called Johannesburg accelerated the that had to be paid in cash
It can be argued that a two-tier labour system existed in South Africa during and this meant that more
development of capitalism and the creation of a working class in South the phases of colonialism and apartheid, with most workers occupying
Africa, as more and more black workers were recruited from rural reserves and more black men were
extremely precarious positions while white workers had access to better compelled to enter the wage-
and from neighbouring African countries. working conditions and decent wages. based economy. This led to
Migrant work in South Africa started before the discovery of gold in land dispossession and the
Rural Womxn’s Unpaid Work Subsidises Growth of MEC destruction of the African “
1886. For example, there was a migrant labour system in the agricultural
peasantry
sector and in diamond mining. But the discovery of gold intensified the The whole system was sustained by unpaid care-work conducted by
migrant labour system. Taxes were introduced by colonial governments black womxn, who had to take care of the families in the reserves. Black
that had to be paid in cash and this meant that more and more black men would only see their families once a year, as they were contracted
men were compelled to enter the wage-based economy. This led to land to work in the cities and towns for almost a year. It can be argued that
dispossession and the destruction of the African peasantry55. black womxn were the heads of their households, since they looked after
children and organised food and other services for entire families, with
The migrant labour system in South Africa, which came after colonialism
little or no state support. The low wages earned by black men meant that
and the dispossession of the black people who are the original inhabitants
black womxn’s unpaid labour in the reserves subsidised the state and the
of southern Africa, was another form of precarious work. In the 1800s,
private sector, which did not provide welfare for the black majority56.
black males were compelled to work in the mines as migrant workers and

55
Callinicos, L., 1985. Gold and workers (Vol. 1). Ohio University Press.
56
Moodie, T.D. and Ndatshe, V., 1994. Going for gold: Men, mines, and migration (Vol. 51). Univ of California Press.

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A conglomerate is a large Entry of Black Womxn as Domestic Workers and Retail of concentration in the South African economy, as large corporations and
company composed of a conglomerates came to dominate key sectors – the MEC (Minerals Energy
number of other companies Besides industrial workers, black workers in retail and services sectors Complex) (Fine & Rustomjee, 1996).
Concentration occurs when tended to be employed in extremely precarious positions even at the
fewer and fewer companies height of unionisation and worker militancy in the 1980s. They were During apartheid, economic power was concentrated with English mining
control more and more of also involved in challenging racism, sexism and the cheap-black-labour and finance capital (big banks) on the one hand, and political power was
the economy system. A good example of union action occurred in 1986, when the black in the hands of Afrikaner interests controlling the state. Industrial policy
workers employed by the OK Bazaars, one of the biggest retail chains promoted Afrikaner economic interests in core sectors of the economy,
at that time, organised a full-blown strike to challenge the company’s mining and finance. Their success depended on harnessing English capital
policies regarding race and gender, as well as to protest about low wages. in mining and finance. In turn, English capital depended on the state.
Kenny notes that retail companies, OK Bazaars in particular, employed The state promoted Afrikaner finance to make it easier for capital to
mainly black womxn, who were often victims of racism in the workplace, become concentrated in Afrikaner mining and other economic interests.
sexual harassment and abuse by employers and customers. About 10 000 The Industrial Development Corporation (IDC), is the state entity that
workers at more than 100 OK stores throughout South Africa demanded originally provided financial support to Afrikaner economic interests.
an end to unfair dismissals, starvation wages, poor working conditions, Industrial policy included the establishment of state-owned mega-
sexist and racist behaviour57. projects critically dependent on mining inputs and critical as inputs into
mining – specifically energy - from which the likes of Eskom and SASOL
The origins of a skewed financialised industrial structure have been built. The apartheid regime also made use of prescribed assets
The economic effects of the policies of dispossession by the land and in order to develop the racialised economy. Prescribed assets were
through the market throughout the 19th and 20th centuries was to stifle governed by the Pensions Fund Act of 1956. Every pensions fund had to
the emergence of a class of small-scale black business owners. The state invest at least 10 percent of its total assets in government bonds and
and capital enforced the super-exploitation of black male workers which 40 percent to prescribed stocks. Firms located in the MEC were amongst
was subsidised by the unpaid labour of black womxn shackled to the those targeted such as the steel company Iscor (now Mittal Steel) and
underdeveloped rural areas. These processes would lead to high levels Sasol and other activities and government bonds such as water services

57
Kenny, B., 2018. Retail worker politics, race and consumption in South Africa: Shelved in the service economy. Springer.61

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and National Defense Bonds. Prescribed assets were abolished just surpluses as a share of GDP in the domestic economy (Newman 2014).
before the end of apartheid in 1989. By 1989, just over half of pension This saw the increase in purchase of financial assets by non-financial
funds assets were prescribed assets. corporations throughout the 1980s that fuelled the rapid expansion of,
and developments in, the financial sector made possible by a series of
In addition, there was heavy protection of manufactured consumer
financial sector reforms (figure 18). The financial sector reforms of the
durables (washing machines, fridges and the like) for a small section
1980s amounted to deregulation through the abolition of specialised
of society, mainly white. It also offered small-scale support for labour
bank categories and the removal of barriers against foreign entry into the
intensive activities to ensure full employment for the white population.
sector and the shift to international standards for capital requirements as
The outcome of this industrial strategy was a heavily skewed industrial prescribed by Basel and saw the rapid expansion of the financial sector.59
structure, with ownership highly concentrated in six conglomerates
There have been significant changes since the 1980s that have
(definition on p9 & p92) that collectively owned 83% of the stock market
transformed the economy and the MEC itself. But these changes have not
in 1988.58 These companies came to be the dominant players in the South
altered the strong disadvantage that small and informal producers face in
African economy, and they are emblematic of the concentration which has
the economy.
historically crowded out small-scale enterprises.
As discussed above, industrial policies of the apartheid era involved the
promotion of finance. With the crises of debt and political legitimacy,
the 1980s and early 1990s saw volatile and negative GDP growth rates
that were driven by divestment (negative growth in the capital stock)
that resulted from external economic sanctions and the reluctance of
domestic capitalists to invest in long term investments with growing
political uncertainty. Trapped by economic sanctions, domestic capital
sought different avenues for investment via the financial sector. The period
from the mid-1980s until the early 1990s saw persistently large financial

58
Fine, B and Rustomjee, Z. (1996). The political economy of South Africa: From minerals energy complex to industrialisation, Johannesburg: Witwatersrand University Press
59
Verhoef, G. (2009). Concentration and competition: The changing landscape of the banking sector in South Africa 1970–2007. South African Journal of Economic History, 24(2), 157-197.

Inequality Report 2020 93

 C4
C - WhatCis- behind-classist,
WhatC is What
behind gendered
is classist,
behind & racialised
classist,
gendered labour
gendered inequality
& racialised
& racialised in South
labour market
labour Africa?
inequality
market inequality
in SouthinAfrica?
South Africa? The Historical
TheEconomic Reform
Financialised
Origins of thesince
Minerals1994
Financialised
and Energy
MECComplex

Economic
Reform
since 1994

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 C - What is behind classist, gendered & racialised labour inequality in South Africa? Economic Reform since 1994

Economic Reform since 1994

Economic reform since 1994 has been shaped by the interests of South Economic Empowerment (BEE) that was initiated by the conglomerates. In ‘Feminisation’ of work and
African capital. The crisis period of the 1980s saw capital trapped within the first decade of democracy, industrial policy took a back seat. growing unemployment have
the national economy because of international sanctions and capital deepened womxn’s difficulties.
The only sector that received policy attention backed with real
controls, and it was reluctant to invest in fixed assets (investments that In the Vanderbijlpark area,
programmes for investment was the automotive sector via the Motor where one of the biggest
cannot be moved). Democratic transition promised corporate unbundling
Industry Development Program (MIDP). The automotive industry was the plants of the AreclorMittal
and a shift from an ‘old economy’ to a ‘new economy’. South African capital
only sector outside of the MEC-core that saw positive investment and Company is situated, the
was eager to internationalise by moving to stock exchanges outside South
growth in value added and employment, except for food and beverages, township of Bophelong
Africa (relisting offshore). By doing this they wanted to make the most was deeply affected by
which has expanded into other countries in the region (South African
of new opportunities for profit offered by an increasingly globalized and retrenchments, leading to
Breweries, for example).
financialised economy, and also benefit from exporting capital and profits. womxn becoming heads of
The Duty Credit Certificate Scheme (DCCS) for clothing and textiles was households. This places
Conglomerates managed to capture macroeconomic policy to their womxn in a contradictory
completely inadequate to support that sector in the face of competition
benefit60. Macroeconomic policy describes actions that the state can take position, which is
from imports, and the sector was particularly hard hit after 1994. By 2017,
by itself to affect the whole economy, such as inflation control. Meanwhile characterised by violence
there were 115,000 fewer jobs in textiles and clothing than there had been
they supported growth of the conglomerates through financing from the against womxn and a general
in 1993. emphasis on patriarchy.
Industrial Development Corporation (IDC) and tax breaks that assisted the
expansion of mineral processing during the period of transition, which in Deindustrialisation under GEAR was devastating to the labour intensive Rather than increasing
sectors, further strengthening the MEC and weakening employment. their power, the situation
turn helped conglomerates to go international after 1994.61
deepens patriarchy.
Manufacturing’s share of the country’s total production has shrunk
In 1996, the South African government adopted GEAR, with its neoliberal The decline of industries
dramatically, from one fifth (21%) in 1993 to less than one twentieth
macroeconomic framework that reflected the interests of conglomerate like textile and clothing
(4%) in 2017. Manufacturing’s share of employment has fallen from
capital. GEAR rested on policies such as control of inflation (which often manufacture in areas like
14.8% to 9.4% over the same period. This pattern of deindustrialisation
means wages must be kept back), cutting state spending and reducing KwaZulu-Natal has placed
has made manufacturing more capital intensive (meaning it relies on an additional burden on
government debt, opening our markets to cheap imports of foreign
large investments and less labour). This speeded up the growth of womxn, who must work in the
goods, and high interest rates that supported the globalisation and
unemployment associated with the decline of manufacturing. In 2010, informal economy and also
financialisation of South African economy62.
light manufacturing had fallen to just 33.8% of the net value of output in use social grants to support
Politically, the tension between the interests of the conglomerates and total manufacturing. This has ruined the prospects of youth employment, their households. This has
the black majority, particularly MEC conglomerates in mining was resolved as the uptake of semi-skilled workers has shrunk. given rise to the Blesser
through promoting and co-opting a black elite through the policy of Black

61
Zalk, N. (2017). The things we lost in the fire: the political economy of post-apartheid restructuring of the South African steel and engineering sectors (Doctoral dissertation, University of London, School of Oriental and African Studies).
62
Ashman et al. 2011, Alami 2018)-

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Culture or an exchange of GEAR Revisited Austerity Actions taken by Government

money for sex between men
and young womxn has caused The global economy remains in crisis since the Global Financial Crisis Low expenditure on public services:
an increased in the social of 2008. By some estimates, 1 million jobs were lost at the start of the
vulnerability of young womxn. crisis. The youths, especially those aged 15- 24 with only a matric or less, According to the Institute of Economic Justice, expenditure has not
In some instance, womxn experienced the greatest job losers. By other estimates, 570 000 out of kept up with population growth since 2014. For instance, in healthcare,
remain in violent and abusive
the 700 000 that lost their jobs were youth. expenditure has slowed over the last five years. This has impacted the
relationships for economic quality of care given by healthcare workers who complain of exhaustion
survival. However, what started as a crisis in the financial system that was caused and stress. For instance, the number of nurses per 1000 population has
The workforce has changed by the rich elites, is being solved in the homes of the poor. Governments drastically declined from 2008-2018 by 11.8%.
drastically. There is now a across the world, including our own, are making the political choice of
declining male workforce implementing austerity measures in the hopes of reducing public debt Regressive taxation:
in the manufacturing and and stimulating economic growth. This is sure to have greater social costs The South African tax system is generally progressive. This means that
mining sectors, which are as discussed.
represented by established the more you earn, the more you are taxed, or the less you earn the less
unions. Precarious forms What are austerity measures? you are taxed. However, there has been creeping austerity in other areas
of work are more prevalent, of the tax system too.
and it appears that they These are government policies and actions taken to solve the “debt and
are a permanent feature growth problems during a period” of low economic growth, no economic • Personal Income Tax: the inflation-linked adjustment of PIT brackets
of the South African labour growth or negative economic growth. The types of austerity measures has meant that, overtime the effective tax rate for high income earners
landscape. Most significantly, that concern us because of their effects on womxn and girls and dignified has decreased dramatically. As shown below, the adjustment of tax
black womxn are entering the work are: Low expenditure on public services; cuts to the national budget brackets has led high-income earners to save substantial amounts of
labour market as precarious
especially directed towards public services; regressive taxation where the money.
workers with little access to
the labour rights that have poor pay more tax than the rich; labour market reforms and conservative • Indirect taxes: Taxes on goods and services (indirect taxes) are
been won and having to start monetary policy. We focus here on low expenditure on public services, increasingly regressive. The top 10% (10th docile) contribute towards
from scratch in rebuilding cuts to the national budget especially directed towards public services, only 56.9% of all indirect taxes, almost at the same level as their share
workplace organisations. regressive taxation as the other two have been discussed in pages 96 & of the national income (56.7%). At the same time those considered
[X-REF SEE BUHLE’S TESTIMONY, 97. under the PIT thresholds to be too poor to pay income tax (the bottom
p19]

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50% - decile 1 to 5) are contributing as much as 5% of total indirect tax Impact of Economic Reforms on Unpaid Care, Paid Care Work
contributions whereas their share of disposable income is only of 4.8% and Youth
nationally.
These negative impacts have huge social costs. Womxn are more exposed
• The controversial tax breaks offered to wealthy individuals: Currently to gender-based violence. Moreover, womxn are left to fill in the gaps left
classified as tax expenditures, these tax credits are offered to wealthy by a shrinking public services as their unpaid labour increases which stops
individuals earning above R500 000 rand per year. These credits are them from participating in the market economy. Lancet’s Global Burden of
government subsidies taken from the budget and then directed to Disease study has placed South Africa amongst the countries in the world
private healthcare and insurance providers to pay for these wealthy that do not have enough health workers to deliver quality care services.
individuals’ private healthcare (medical aid) and pension schemes. A study has shown that VAT reduces disposable income and therefore
Therefore, these taxes are not collected that stop the national budget the power to make purchases of goods and services. This drastic fall in
from important revenue resources. income is mostly felt by the poor, particularly womxn63. Southern Africa
• Corporate Taxes: Taxes on companies’ income have decreased since Towards Inclusive Economic Development (SA-TIED) argues that scrapping
1990 from 50 percent to 25 percent. This follows a global race to the the zero-rated items, and using the resources (R20 billion) to finance more
bottom where countries decrease taxes charged at companies in social benefits, would result in reduced poverty and inequality.64 A higher
the hope to entice them to invest in their economies. This strategy VAT on luxury goods can be another important measure to raise revenue
has generally failed including in South Africa. Instead, the country and redistribute income.
has missed the opportunity to raise public finances. If the rate of the Impact of Economic Reforms on Informal Sector
Corporate Income Tax was still at its previous levels of 50% in 1994 or
35% in 1999, R410 billion or R287 billion would have been collected for With rising unemployment, and fewer jobs in the formal sector, one would
the 2019/20 budget year, instead of R229.6 as planned currently. This think that the informal sector would be a shock absorber that takes in
would be able to contribute to reducing Eskom’s massive debt that job losses from the formal sector. The biggest obstacle to the informal
threatens our economy. sector is outside the informal sector. This report argues that the main
cause of South Africa’s small informal economy when compared to other
Government’s False Hope countries, is not found within the informal economy itself, but rather in the
The South African government believes that austerity will boost economic structure of the country’s highly concentrated formal economy. However,
growth. This strategy is a false hope. Austerity only leads to a bad mix of there are government policies and practices that also contribute to the
inequality, low growth, unemployment and rising debt. sector’s smallness, wherein the formal and informal sectors are tightly
interconnected.

63
Institute for Economic Justice. 2018. Mitigating against the VAT increase: Can zero-rating help?
64
Modelling value added tax (VAT) in South Africa: Assessing the distributional impact of the recent increase in the VAT rate and options for redress through the benefits system.

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The size of conglomerates compared to the economy has declined since In some countries, informal producers such as small farmers sell to
1994, but they have reorganised rather than lost their central role. As big supermarkets, and so the expansion of supermarkets expands the
government lifted restrictions on outside trade, South African firms have informal sector. In South Africa, however, big companies try to buy or
become integrated into global economic networks, which pressured the otherwise control the whole value chain, from production all the way
sprawling conglomerates to change their businesses and concentrate through to distribution. They set standards about quality and quantity of
in “core” activities which generated the most money. However, as their produce which are too high for small producers to meet, and require their
activities became more focused on core activities, they extended their producers to pay marketing fees, provide discounts and wait a long time
operations to take over or control their suppliers and distributors within for payments. All of this makes it very difficult for small producers to get
their core sectors (this is called vertical integration). Chabane et al. (2006) into the game, and traps them as very junior partners if they do.
conclude that “the positions of major conglomerates are if anything even
In the informal trade of food sector, supermarkets have expanded rapidly,
more entrenched, especially in industrial and mining sectors” (p. 573).
pushing into townships and rural areas that previously relied on informal
The high levels of concentration in manufacturing helps to explain why traders.
South Africa not only has a small informal sector, but also one that is
South Africa is number 6 globally in the amount of space given to shopping
mainly made up of low-profit activities such as retail trading and personal
centres. South Africa and New Zealand are the only countries outside
services. Many sectors that are the domain of the informal sector in other
Europe and North America to feature in the top 25 for formal retail space.
low and middle-income countries are controlled by large formal firms in
South Africa. Examples include, agriculture, processed food, clothing, Another global trend which has played out in the South African economy in
and furniture. As Philip (2018b) notes, the high concentration and vertical recent decades is increasing financialisation. The South African economy
integration of many sectors means that many producers also control has long been heavily financialised, both through the role of financial
the supply of their own raw materials - for example, bread producers firms and the financial activities of non-financial firms. But the form
control flour —which allows large conglomerates to outcompete small and effect of financialisation has changed with the liberalization of the
rural producers despite the rural producers’ advantage of low transport economy. As Karwowski (2018) shows, companies have used liberalized
costs and wage expectations. Small enterprises in these sectors find capital markets to attract foreign capital investment; however, rather
themselves in a position where their suppliers are also their competitors than investing in productive activities, these new funds have been held in
(Philip, 2018a, p. 315). commercial banks, and ultimately have fuelled an expansion of lending to
consumers and inflation in property prices.

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The expansion of credit, which is at the same time an expansion of consumer GEAR called for deepening labour market flexibility and privatisation, for
debt, has consequences for informal producers, and in particular informal further opening up the South African economy to promote and entrench
traders. global competition, and for deregulation and austerity measures to reduce
state expenditure on social services.
The ability to offer credit is a further market-based advantage that large
formal retailers have over small informal traders; thus giving further Webster and Kenny argue that the flexible forms of employment introduced
advantage to the large chain stores. This has also resulted in a boom in by employers were attempts to weaken the labour movement and remained
property values and development has led to the expansion of shopping a real threat to permanent workers who had labour rights and better
malls and formal retail sites in areas, such as townships and rural areas, working conditions. Other scholars argue that although precarious forms
which were previously serviced by informal traders. of work are a global phenomenon, the labour movement in South Africa,
particularly COSATU affiliates, tend to focus on ‘palace politics’. Political
Impact of Economic Reforms on Labour connections and being part of the ANC provides better job opportunities
GEAR’s neoliberal framework had effects within workplaces, where and income for COSATU-linked trade unionists. That is why, instead of
employers were able to restructure work by introducing new technologies, responding to shop-floor challenges regarding precarious work, union
outsourcing, labour brokering and employing casual and contract leaders spend time, energy and resources intervening in the political
workers. These measures reduced the power of workers and trade unions direction of the ANC government, which, in turn, implements policies
by fragmenting and restructuring the workforce65. which harm workers68.
Precarious work, which used to be referred to as unusual forms of work in In South Africa the re-organisation of work dates from the 1980s and has
the 1980s, became the typical forms of work in the 1990s and the 2000s66: had far-reaching implications for workers. The organised workforce was
“Flexi-work [or precarious forms of work] is being introduced at the same massive and organised in factories and mines affiliated to relatively strong
time as South Africa’s first democratically elected government is trying to trade unions. This pattern has been fragmented, both by the changing
extend basic core rights and standards to large sectors of the workforce nature of the labour process and by the inability of trade unions to respond
that have been excluded in the past from the core labour regulation to this change. The democratic dispensation was a contradiction in the
regime.67” sense that formal apartheid laws were repealed and the black majority

65
Buhlungu, S., 2010. A paradox of victory: COSATU and the democratic transformation in South Africa. University of KwaZulu-Natal Press.
66
Kenny, B. and Webster, E., 1998. Eroding the core: Flexibility and the re-segmentation of the South African labour market. Critical Sociology, 24(3), pp.216.
67
Kenny, B. and Webster, E., 1998. Eroding the core: Flexibility and the re-segmentation of the South African labour market. Critical Sociology, 24(3), pp.216.
68
Masondo, T., 2012. The sociology of upward social mobility among COSATU shop stewards. COSATU’s Contested Legacy: South African Trade Unions in the Second Decade of Democracy, pp.110-131. Buhlungu, S., 2010. A paradox of victory: COSATU and the democratic transformation in South Africa.
University of KwaZulu-Natal Press.

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attained political rights; however, generalised neoliberalism introduced were demanding a living wage were massacred by the state police, and
at the same time has led to the return of precariousness, where workers the union that was supposed to defend the interests of the workers was
earn low wages and have neither job security nor benefits. culpable in the massacre, demonstrating a social distance between the
unions and workers.
The decline in manufacturing and mining employment (discussed earlier
in this report) has weakened the unions, which used to be anchored by Social distance and bureaucratisation did not only affect leaders of
workers employed in industries. trade unions occupying powerful positions in national offices. In a survey
conducted in 2012, it was revealed that 39% of COSATU members were
Several surveys of COSATU, the biggest union federation in South Africa,
drawn from public sector unions, showing a significant increase in public
have shown that permanent public sector workers who are professionals,
sector workers, who comprised only 7% of the workforce in 1991. The
like nurses, police officers and other state officials with university and
same survey showed that more than a third of shop stewards interviewed
diploma qualifications, have a strong presence in the federation. It has
were not interested in community or service delivery issues.
also been shown that the union federation has fewer workers employed
in the private sector, particularly precarious workers. At the same time, The division within COSATU became evident when the National Union of
leading union officials have used their proximity to the ruling African Metalworkers of South Africa (NUMSA), the biggest union in South Africa,
National Congress to access high-paying positions in the public and was expelled from COSATU in 2014 due to political differences over the ANC’s
private sectors, thereby weakening the ability of the unions to represent inability to defend and advance the interests of marginalised workers.
the interests of workers69. Subsequently, a new union federation called the South African Federation
of Trade Unions (SAFTU) was launched in 2017. With its membership drawn
The bureaucratisation of the unions and a social distance that exists
mainly from NUMSA, the new federation claims to be representing 700
between workers and the union leadership has far-reaching implications
000 workers.
for workers and the unions. For example, in 2012, 34 mine-workers who

69
Webster, E., Britwum, A.O. and Bhowmik, S. eds., 2017. Crossing the divide: Precarious work and the future of labour. University of KwaZulu-Natal Press. Scotville. Masondo, T., 2012. The sociology of upward social mobility among COSATU shop stewards. COSATU’s Contested Legacy: South African Trade
Unions in the Second Decade of Democracy, pp.110-131. Buhlungu, S., and M. Tshoaedi, eds. 2013. COSATU’S Contested Legacy: South African Trade Unions in the Second Decade of Democracy. Brill: Leiden.

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Other Social
Impacts of
Financialised MEC

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Land dispossessions Act. There are many cases that expose the injustice that mining capital
has inflicted on communities. The Xolobeni case, is a famous case in
South Africa’s land reform process meant to benefit the poor (urban and which the community has been battling an Australian mining company
rural poor, farmworkers, labour tenants, as well as emergent farmers) for against attempts of dispossessing the community of peasants from their
their residential and livelihoods’ needs has been elite captured. land. Another less known case is the Mokopane district Case.
The MEC has contributed to inequalities through the continued process Smallholder farmers located in Limpopo Province in South Africa were
of dispossessing communities of their land for the purpose of furthering dispossessed off their land by a foreign mining company. The Department
mining wealth for the few. Mining companies have been aided and abated of Mining granted Ivanplats a 30-year mining right on 30 June 2014 without
by the state and ‘other governmental actors’. The Department of Minerals following due process in line with the IPILRA and other international
and Resource and traditional leaders have been key actors in the land principles for responsible investment. A total of 20 villages under Kgoshi
grab process. (Chief) L.V. Kekana in Mokopane district, amounting to about 150 000
As a result, most of the land for mining projects is acquired by force people were directly and indirectly affected. To meet BBBEE regulations,
and/or via non-voluntary means because due process is not followed in the mining company registered Platreef BBBEE as a private limited company
line with the Interim Protection of Informal Land Rights Act (IPILRA) and and constitutes ‘local communities, local entrepreneurs, and staff’.70
other international principles for responsible investments such as Free, This transaction has not helped this community as they were awarded a
Prior and Informed Consent (FPIC). The investors disregard IPILRA which loan of R2.6 billion for the transaction without knowing the terms of the
protects informal land occupiers because they are required to consult loan. This has resulted in the massive debt that must be paid back to the
and to seek consent from affected communities. Mining capital chooses company at a 75% interest rate.
the Mineral and Petroleum Resources Development Act, 2002 (Act No.
Climate Change
28 of 2002) (MPRD Act) in its investment decisions because it promotes
easy dispossession of locals in the context of weak governance and South Africa is the world’s fourteenth largest emitter of carbon dioxide,
unequal power relations. Traditional leaders are seen as the authority to the primary pollutant linked to climate change. South Africa pollutes even
sign agreements with investors to cede communal land which is mainly worse when we count the amount of pollution produced per person. We
worked by womxn. This is based on the wrong application of the Traditional release 7.4 tonnes of carbon per person into the atmosphere in a year,
Leadership and Governance Framework Act (TLGFA) of 2003 and the MPRDA making the country the tenth worst emitter in the world.71

70
Interview, Moremi Pehashidi, Mokopane Trustee, Mokopane. Also see Ivanhoe Mines Ltd, 2016. The Platreef 2016 Resource Technical Report has been prepared for Ivanhoe Mines Ltd. (Ivanhoe) by OreWin Pty Ltd (OreWin), Amec Foster Wheeler E&C Services Inc (Amec Foster Wheeler), SRK Consulting Inc
(SRK), Stantec Consulting International LLC (Stantec), DRA Projects (Pty) Ltd (DRA) as the Report Contributors.
71
Figures from Union of Concerned Scientists. 2019. ‘Each Country’s Share of CO2 Emissions’. 19 October 2019 (updated). https://www.ucsusa.org/resources/each-countrys-share-co2-emissions.

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The reason for South Africa’s poor performance is that it relies on coal for because the MEC was set up on the premise that men would work in the
the majority of its electricity production. mines and womxn would do the unpaid care work needed to support them.
But roughly 30% of South African population is not on the grid meaning The result of all this is the opposite of a good development policy – a focus
that they hardly contribute to these figures. Though research has yet to on resource extraction and financialisation of the economy as opposed
be done specifically on South Africa, Oxfam estimates that at the global to sustainable industrial development that would create more and better
level as much as 50% of carbon emissions are generated by the top 10% jobs, especially for womxn and young people. The job crisis is set to
of the population.72 worsen with governments’ continued austerity which will hurt womxn and
young people from meaningful economic participation. For womxn their
South Africa is likely to be even worse than the global trend because
burden of care work arising from budget cuts in public services is set to
the primary consumer of energy is the MEC itself. According to a report
exclude them from participating in the labour force, for young people cuts
that Deloitte consulting prepared for Eskom in 2017, MEC related sectors
in education for instance will make them less employable.
account for a whopping 47% of South African energy consumption. By
contrast all residential energy use only accounts for 20%.73 Thus the MEC There are also other social impacts of the financialised MEC. The MEC
is both the cause of the underlying problem – an overreliance on coal – dominance over land allocation policy means that there is little scope for
and the primary beneficiary as a huge percentage of the power produced small farmers or rural livelihoods. This is a continuation of the dispossession
is going back to the MEC. suffered under colonialism and apartheid that squashed the emergence
of rural livelihood out of which the MEC was born. The MEC is a major driver
In conclusion to this chapter, financialised MEC dominates not just the
of climate change both as a consumer of energy and as a producer of
South African economy, but South African politics too. This is because
coal. Without taking real measures to reduce the size and influence of
since it accounts for a large percentage of the South African economy,
the MEC – by investing in sustainable and pro-womxn industrial policies
governments have been unable to confront the MEC in a meaningful way,
(meaning an end to austerity measures), enacting and enforcing better
and neoliberal economic reform undertaken at the beginning of the post-
regulations and taking measures to discourage capital flight, ensure a
apartheid period mean that the money the financialised MEC generates
macroeconomic policy that targets jobs and that the MEC pays its share
need not be re-invested into the economy – they can leave the country or
of tax – it will be near impossible to reduce inequality.
even the continent and often do. Womxn are excluded from dignified work

72
Gore, Timothy. 2015. ‘Extreme Carbon Inequality: Why the Paris Climate Deal Must Put the Poorest, Lowest Emitting and Most Vulnerable People First’. Oxfam International.
73
Deloitte. 2017. ‘An Overview of Electricity Consumption and Pricing in South Africa’. http://www.eskom.co.za/Documents/EcoOverviewElectricitySA-2017.pdf.

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Dade: struggling to be
self-employed [BOX]

Dade, who we met on p17 above, got emotional telling the story of her this area there was a slaughterhouse nearby that supplied meat to coal
past. Here she tells more of the violence and ill-treatment she faced from mine workers. My grandmother saw this as a business opportunity and
white farmers when she was a child, the constant setbacks her family had started selling this meat. The slaughterhouse would sell the meat to my
to deal with, and her struggles to be self-employed. grandmother for a tickey (2 and ½ cents). It would have been the equivalent
of meat that you can buy for a R100 today.
As I had said my uncle also experienced ill treatment by the white people.
He was also beaten up by the farmer owner and this got my grandmother My grandmother would then sell this meat to households who weren’t
kicked off the farm. able to go to the slaughterhouse themselves because it was a bit of a
distance from where people stayed. I would help my grandmother sell
My grandmother’s name was Nonkelevana, she had grown up on a farm
the meat and it would give us a Zuka (5 cents). So I grew up selling that
owned by the white farmer’s father; she later moved to the son’s farm
meat for my grandmother and helping her out while my mother stayed in
[the white farmer who beat up Dade’s uncle] where she built her house.
Johannesburg where she worked as a domestic worker.
The farmer told my grandmother, “I would let you stay on the farm but I am
evicting you because your son is important to you and he will miss you, he As I grew older, my mother came to ask my grandmother that I move to
will want to come and see you and I don’t want him on my farm, go and find Johannesburg (Soweto) to stay with her and assist her in the city. This was
somewhere else to stay.” around the late 1960s. I came to live with my mother and started selling
for her in the township. My mother was also a street trader in town - she
My grandmother asked him where she would find another place to
was selling fruits, vegetables and second-hand clothes around Jeppe
stay because “the letter you will give me will make other farm owners
Street and Park Station.
reluctant to let me live on their land”. After that my grandmother moved to
Dannhauser at a place that we called ko noKitshini [Translated, a place for Around 1970, my mother and I did not have a permanent place to stay -
kitchen workers, that is domestic workers]. This was a place where there we would rent at different places for short periods of time. At one place
were no white people, indawo zabantu [a place for black people]. When we stayed it, Kwa Mhlabathi [referring to the owner of the house] in the
we moved to the area it was around November, which was rainy season, township, everyone who was renting in that house got arrested. One of the
so that made it difficult to build a house. Eventually we managed to build womxn who lived in the house snitched to the police that my mother did
one house in which my grandmother, my aunt (the wife of my uncle who not have permits and papers for her children (myself included). We then
had gotten beaten up by the white farmer) and I stayed. got taken by the ‘Black Jacks’ [Black men employed in place of regular
policemen to enforce pass laws] to Zola Police Station and because I was
As we were no longer on a farm, things were different there in terms of
old, the police said I should have had a pass by then.
food supplies, where the food was normally provided by the farmer. In

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I did not have necessary documentation or permit to be in Johannesburg. After having my first child in 1973, I started selling for myself and to
My mother did not know when I was born exactly, and the law required support my child. I had to work for myself - I could never work for white
the exact date (day and month) when you were born. The hospital where people again because of the beatings I had experienced in the past.
I was born had closed, so we couldn’t get my birth certificate. At the
Because I had gotten my permit and pass, I then got my license to be a
police station there were nine of us who were arrested for not having
walker - a movement license - which meant you could sell your goods
documentation/papers.
moving from one point to another. During that time there were few of us who
There was a school called Zibukeli, and through the assistance of a local weren’t scared of going beyond Park Station to sell their goods. We had to
councillor he helped get me a letter from the principal that said I had hide our movement license because the police would tear them whenever
attended Sub A and Sub B (grade 1 and 2) at that school. With this letter, they wanted, you would only show your license if you got arrested.
we estimated that I was born in 1952. And if I hadn’t gotten this letter, I
would have had to leave Johannesburg.
I am not sure when I was actually born, but I was quite grown when I was
working on the farm and during the 1960s when the hit song Pata Pata
came out I was old enough to remember the song and the dances, so that
tells me I was born much earlier than 1952. After the assistance of the
councillor with the school letter, I got my pass at the end of 1970.
It was difficult getting the pass. You would need to be able to speak
Afrikaans; they [the officials] would ask Soweto street names in Afrikaans
to try and see if you were really from Johannesburg. I didn’t speak Afrikaans,
so this was hard for me.
I started selling in town with my mother during the times when you had
to move around from one place to the next because of the fear of getting
arrested and getting your goods confiscated by the police.

Inequality Report 2020 105

 D
D - How the state’s microeconomic policy and practice maintains the status quo

How the state’s

microeconomic policy
and practice maintains
the status quo

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D - How the state’s microeconomic policy and practice maintains the status quo

D1 At work in the formalised sector Pg 109

D2 At work in the informal sector Pg 114

D3 Industrial policy Pg 116

D4 Political and corporate capture as a driver of inequality Pg 120

D5 Taking the fight into the future Pg 127

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D - How the state’s microeconomic policy and practice maintains the status quo

How the state’s microeconomic policy and

practice maintains the status quo
This section details some key mechanisms by which the big picture of
conglomerate dominance translates into making work less equal and
creating inequalities in finding work, often via government policy.
We look specifically at labour laws and practices affecting the formal sector workers to understand how
they contribute to precarious work faced by womxn and youth (section D.1); policies affecting informal
sector workers to understand how they contribute to conglomerate dominance, the small size of the
informal sector and decline in womxn informal sector workers (D.2); how industrial policy, while necessary,
has been ineffective at job creation in general, and has been inadequate for womxn empowerment in
particular (D.3); and finally how political and corporate capture is undermining the developmental project
and contributing to inequality.

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D1
D - How the state’s microeconomic policy and practice maintains the status quo At work in the formalised sector

At work in the
formalised
sector

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D - How the state’s microeconomic policy and practice maintains the status quo At work in the formalised sector

At work in the formalised sector

Saving on labour costs Labour laws which divide workers and weakens unions Bargaining councils
In the past, the Minister
Precarious work was generated by employers seeking to minimize The Basic Conditions of Employment Act (BCEA) and Labour Relations Act of Labour or the Registrar
labour costs and shift their risks to workers. This has deeply divided the (LRA) were some of the most progressive labour legislation globally when were required to establish a
workforce into more stable, permanent workers and precarious casuals they were enacted; and they were a major victory during a period when bargaining council or extend
and subcontractors, which increases inequality amongst workers, and other policies were very neoliberal. However, they have been undermined agreements to parties outside
increases overall inequality. or not enforced. the bargaining council once
they were satisfied that

“
The BCEA covers all workers’ working condition such as leave, safety, the employer organisations
hours of work etc. Under the LRA of 1995, the labour and pay conditions employed the majority of
Under capitalist systems, work has always been precarious. However, (including the minimum wage) is left to Bargaining Councils established workers and that unions
by the unions and employers in each sector. In cases where unions are represented the majority
conditions of precarity have often been mitigated by the ability of workers
of workers who were union
to mobilise and organise. For example, in the post-World War Two period too weak to bargain then the Minister of Labour sets wage rates. In this
members. But the latest
in the Global North, it was trade unions and other workers’ organisations way, the restructuring of the labour market has reflected the sectoral amendment to the law on
that made it possible for workers to gain advantages that countered restructuring of the economy, entrenching the power of capital, by limiting bargaining councils states
the precarious conditions imposed by the state and the private sector. collective bargaining to the sector level. that representivity will be
It should also be noted that, even in the post-war period, there were decided based on employer
Sectoral determinations in the context of uneven union organisation and organisations employing the
workers, especially migrants and women, who were consistently regarded
the concentration of capital in the South African economy resulted in the majority of workers, or the
as precarious workers.
fragmentation of the working class into the protected and the unprotected, union having a majority of
The late 1960s and early 1970s saw the rise of neoliberalism as a social and a move away from centralised bargaining (typically associated with better members. The implication
economic system based on austerity measures and the implementation outcomes for workers) to bargaining at the local level. Coverage of low- of this change is that the
of changes in the workplace which were designed to neutralise the rights paid sectors has been partial and in this context, labour was unable to unions do not have to have the
majority of workers in a sector
of workers and the progress that had been made in this regard. Since the resist casualization, informalisation and worsening precarity which further
as their members. In fact,
1980s, observers in the Global North have emphasised the occurrence of undermined union organisation.74
an employers’ association
precarious work and of attacks on labour standards and labourers’ rights having majority employees
The LRA also recognised outsourcing and labour broking, which
by the state and the private sector. In the Global South, the phenomenon
of precarious work has always been present.
“ legitimated the continuation and growth of precarious work, as did the
Basic Conditions of Employment Act.
is a sufficient condition to
warrant an establishment
of a bargaining council or
(Mondli Hlatshwayo, 2019) an extension of a collective

74
Di Paola, M., & Pons-Vignon, N. (2013). Labour market restructuring in South Africa: low wages, high insecurity. Review of African Political Economy, 40(138), 628-638

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agreement to non-parties in Undermining strikes Youth and Womxn targeted Employment Programmes
the sector by the Registrar or do not promote Dignified Work
the Minister of Labour. Compulsory secret balloting, conciliation, picketing rules and compulsory
arbitration all work to decrease the heat and limit workers’ right to strike. While the Expanded Public Works Programme (EPWP) has met its targets,
The Casual Workers’ Advice
Office (CWAO) interpretation Large unions with the most power to strike are usually tied up in bargaining womxn (40% is the target) and youths (30 % is the target), it is widely seen
of these changes is that councils. not to produce dignified work.
they are likely to entrench
• It has had limited impact on job creation and job security because it is
the power of established Unfair Maternity and Paternity Leave
unions, which tend to exclude
highly temporary in nature
precarious workers and Womxn are only entitled to four months of maternity leave, and companies
• EPWP has had limited impact on poverty alleviation as wages rates are
employers in determining are not compelled by law to pay for such leave. Womxn who contribute to
below the minimum wage
wages and working conditions. the Unemployment Insurance Fund (UIF) managed by the Department of
In calculating representivity, Labour may claim 35% to 58% of their salary from the fund. The amended • EPWP workers are not recognised as formal workers, therefore do not
4.5 million non-standard Basic Conditions of Employment Act grants ten days’ paternity leave qualify for UIF in spite of the short-term nature of their work. They also
workers or precarious workers do not have pensions and medical aid
which is paid for by the fund, which also covers adoption leave76. This is
will be excluded. The CWAO
a small advance because it accepts that fathers are also parents but the
concludes: ‘The changes will • EPWP is not a stepping-stone to better employment because it
keep minority unions in control discrepancy between paternity and maternity leave means that womxn
only provides low skilled jobs with no job training (Simkins 2007;
of whole sectors and they will are left carrying the baby.
McCutcheon 2012)
have no need to organise the
LRA and BCEA still promotes Labour Broking Even After
other workers.’75 BCEA transportation provisions puts shift workers at risk
Constitutional Judgement.
Section 17 2b of the BCEA states that transportation from the worker’s
The Constitutional Court in the case NUMSA versus Assign Services (Pty),
residence and the workplace must be available at either side of the shift.
a labour broker, ruled that labour brokered workers who work beyond
However, this falls short of forcing companies to actually provide workers
three months must be made permanent workers of the client company.
with safe and secure transportation. Care workers who often work night
However, the judgement only covers workers that earn below R205 433.30.
shifts fall prey to sexual violence and theft due to the use of public
For instance, professional nurses earn above this minimum. Therefore
transport at unsociable hours.
they are not afforded any protections that the BCEA affords permanent
workers such as pensions, medical aid, working hours. Youth wage subsidy given by government to the private sector is meant
to act as an incentive to get employers to employ the youth. There is

75
CWAO. 2017. Submission to the Parliamentary Portfolio Committee on Labour on the Labour Relations Amendment Bill, the National Minimum Wage Bill and the Basic Conditions of Employment Bill, all of 17 November 2017
76
Reporter. 2019. Living and loving. How South Africa’s maternity leave compares internationally. Posted on February 4th, 2019 https://www.livingandloving.co.za/pregancy-blogs/south-africas-maternity-leave-compares-internationally
77
Ranchhod, V., and Finn, A. 2015. Estimating the Effects of South Africa’s Youth Employment Tax Incentive – An Update (SALDRU Working Paper No. 152). Cape Town: University of Cape Town.
78
Ebrahim, A., Leibbrandt, M., & Ranchhod, V. 2017. The Effects of the Employment Tax Incentive on South African Employment (UNUWIDER Working Paper No. 2017/5). Helsinki: United Nations University World Institute for Development Economics Research.

Inequality Report 2020 111

D - How the state’s microeconomic policy and practice maintains the status quo At work in the formalised sector

evidence that it has had no impact on youth unemployment77 and that the in February 2017 by stakeholders in government, labour and business,
limited jobs that were created would have been created anyways78. represented in the National Economic Development and Labour Council,

“
and approved by cabinet later in 201780. The minimum wage debate stems
The campaign for a living wage from a 1994 call by organised labour where, in August 1997 for example, the
The Marikana Massacre essentially revived the struggle of a living wage trade union federation COSATU (Congress of South African Trade Unions) The introduction of a minimum
proposed to lobby for a national minimum wage, in part to “prevent the re- wage of R20 an hour, usually
that had been at the core of the trade union movement emerging in the
emergence of apartheid-type employment strategies”81. punted as R3 500 a month, will
early 1970s. A living wage is defined by Daniel as “… the amount of pay not apply to the largest group
considered sufficient for a worker and their family to cover basic costs Organisations which are for the wage bill are COSATU and FEDUSA (the of the lowest paid: domestic
of living in a given period79”. Marikana was also an important precursor Federation of Unions of South Africa) who have supported the wage and farm workers, let alone
to discussions over a National Minimum Wage. For the first time in our bill. However, the new trade union federation SAFTU (The South African the thousands earning as little
history we have enacted the historic demand of the freedom charter - Federation of Trade Unions) has ridiculed the wage for not being a living as R50 a day in the expanded
for a NMW. The 22% of lower wage workers who have never been covered public works programme
wage and held a national protest, challenging the president to try and
(EPWP). Workers in these three
by any agreement of sectoral determination are now covered. That is a live on it and threatened to challenge the National Minimum Wage Bill in categories are supposed
major victory. Indeed, the minimum wage sets a floor that no employer court if it was passed without input from a wide range of people from the eventually to qualify to be paid
can pay beneath. While it is a starting point, it is a poverty alleviating working class. a minimum of R18 an hour for
strategy rather than an inequality reducing strategy. Indications are that farm labour, R15 for domestic
the gender wage gap at the average has been reduced as a result of the At the other extreme, some economists have warned it may depress work and R11 for those under
minimum wage. This is due to the fact that many workers that did not have South Africa’s already high unemployment rate further by making it more the EPWP umbrella. And, in
a wage setting regime previously were womxn. However, the gender wage expensive to hire workers. all cases, any employer may
gap at the median is not only larger than gender wage gap at the average, apply, on the basis of financial
but also the gender wage gap at the median remains stagnant over time.
This is further justification for a campaign for a living wage.
A CCMA labour conference in 2018 debated the state of readiness for the
implementation of the National Minimum Wage. A speaker highlighted the
hardship, to have the rate
waived.82
“
importance of raising public knowledge and awareness of the National
Minimum Wage, and said that the CCMA’s jurisdiction in enforcing the
A contested concept
National Minimum Wage would expand because the labour department
At the beginning of 2019, South Africa’s first-ever national minimum wage had no capacity.
bill came into effect. The bill states that a minimum national rate of R20 an
hour, or R3 500 if the worker is full time. This agreement was first signed

79
Daniel, D. 2017. South Africa and the introduction of a national minimum wage. Bargaining Indicators 2017, Volume 17, Labour Research Service, Cape Town. p46.
80
Fin 24, 2017, “Cabinet approves minimum wage bill” https://www.fin24.com/Economy/cabinet-approves-minimum-wage-bill-20171102
81
Omarjee L 2019, Everything you need to know about the national minimum wage, Fin24, <https://www.fin24.com/Economy/everything-you-need-to-know-about-the-national-minimum-wage-20190101>. Accessed 12 September 2019
82
Bell, T. 2018. Inside labour stories facts and the minimum wage. 30 December 2018. https://www.fin24.com/Opinion/inside-labour-stories-facts-and-the-minimum-wage-20181130 Fin24.com.

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 D - How the state’s microeconomic policy and practice maintains the status quo At work in the formalised sector

In 2017, the department had one inspector for every 120,000 economically
active citizens, but the ILO recommend one for every 20,000.
Austerity measures within the Department of Labour and the government in
general has led to the diverting of funds intended to strengthen the labour
inspectorate, which is supposed to protect workers, particularly womxn.
The weaknesses of the Department of Labour and its inspectorate mean
that minimum wages and workers’ rights are not likely to be enforced.
With regard to the CCMA, even if workers bring cases and it issues orders
to redress injustices, employers tend to ignore them. The Casual Workers
Advice Office (CWAO) elaborates:
“Over a ten-year period there has been a 52% increase in the numbers of
cases referred to the CCMA. In 2006/2007 123,472 cases were referred,
an average of 496 a day, by 2016/17 this had increased to 188,449, an
average of 745 a day”83.

83
CWAO. 2017. op cit. p18.

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D2
DC -- How
Whatthe state’s classist,
is behind microeconomic policy
gendered and practice
& racialised maintains
labour market the status in
inequality quoSouth Africa? Other SocialAtImpacts
work inofthe informal sector
Financialised MEC

At work in
the informal
sector

114
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D - How the state’s microeconomic policy and practice maintains the status quo At work in the informal sector

At Work in the informal sector

Many government policies and practices that contribute to • National policy and municipal actions do not match.
the volatility and the decline of womxn’s participation in the • Municipal policy is generally punitive and regulates traders heavily
informal sector: without supporting them.
• Womxn’s participation in the informal sector is affected by their home • Around half of Durban traders reported insecurity at the place where
responsibilities, as mentioned above. they sold; confiscation of goods by metro police, harassment from
• Access to credit is a problem for all informal businesses, but particularly police, and eviction from the trading site.
for womxn, given that they have few assets (See, for example, Black • The repressive approach to immigrant traders, far from protecting
womxn’s housing is less valuable, page 28). local traders, is extended to all traders along the lines of illegality
• National government policy talks much of supporting the informal and legality.
sector, but: • Space to trade is a big problem. In many cities, such as Johannesburg,
• It focuses on internal characteristics of the informal sector such traders are restricted from trading in the most desirable areas of the
as skills and reducing competition amongst informal traders by inner city. They are restricted to demarcated markets where they have
scapegoating immigrant traders, but ignores the larger economy to pay fees.
which shapes and limits the informal economy. • The markets are not big enough for everyone who wants to trade
• The fees are not matched by services

False explanations: • Those paying fees are still competing with traders who take the risk
of trading outside the formal markets who don’t pay fees
“Foreign traders are pushing locals out of business”.
It is false because it cannot explain why the sector is so small. • Informal workers also do not have social protection such as: Unemployed
Insurance Fund, occupational health and safety, maternity protection,
“Traders mainly need skills”. Traders themselves argue that
decent working conditions and minimum wages.
accounting skills and so on do not increase the number of people
buying from them and skills do not reduce harassment from • Womxn are more disadvantaged by the harassment because they do
metro police. not feel able to run away from police or confront them and therefore
are more likely to end up paying fees in markets.

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D3
DC -- How
Whatthe state’s classist,
is behind microeconomic policy
gendered and practice
& racialised maintains
labour market the status in
inequality quoSouth Africa? At work in theIndustrial policy
informal sector

Industrial
policy

116
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116
 D - How the state’s microeconomic policy and practice maintains the status quo Industrial policy

Industrial policy
Development financial institutions do not adequately target employment IDC. Approximately R2.2 billion was approved for such businesses. Upon
creating sectors and womxn’s-empowerment business inspection, the womxn-empowered projects were smaller, which is likely
to have influenced the value of approvals. In addition, the structure of
Our Mashonisa Economy relies on short-term, impatient money. Therefore, support provided by the IDC typically applies a cost sharing model and
it does not allow for long term patient money to be mobilised to the benefit access to capital for womxn remains a key barrier to accessing support
of all South Africans. Development financial institutions (e.g. IDC) are vital provided by the IDC (IDC, 2018). Funding approvals for womxn-empowered
in mobilising patient money or long-term investments that can contribute enterprises was directed to industrial infrastructure projects, enterprises
to building an inclusive economy. Research has shown that the IDC has not operating in clothing and textiles, media and motion pictures, tourism and
been successful in contributing to structural transformation towards an the services sector.
inclusive people’s economy. This is based on the following observations
made by Das Nair, Mondliwa and Roberts84: Industrial incentives favour men
• The IDC does not support sectors that typically create employment Industrial policy is skewed towards male-dominated industries.
because capital intensive sectors take up the bulk of finance,
particularly minerals and energy complex sectors.
• The IDC does not adequately support small, medium and micro In 2017/18 73.3% 14.7%
enterprises: the number of loan approvals for SMMEs has declined from of the DTI’s R9.5 billion85 to industrial infrastructure
2002 to 2017 although the scale of funding over the same period has funding for key sectors went 7.6%
increased. to manufacturing,
to film and TV
• Although the IDC’s BEE funding has shifted from funding black people
who buy shares or equities in existing big businesses, the funding and the balance went business process services
of black industrialists continues to be in sectors that do not create towards agriculture (0.3%)
employment. (0.9%) innovation
In addition, womxn-empowered business (where womxn own at least 25% (3.2%)
of the business) received a smaller portion of funding support from the

84
Das Nair, R., Mondliwa, P., and Roberts. 2015. The inter-relationships between Regulations and Competition Enforcement in the South African Liquid Fuels industry, Journal of Energy in Southern Africa, vol 26 (1), pp 11 - 19
85
Annual incentive report, 2017/18. 2018. The dti.

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D - How the state’s microeconomic policy and practice maintains the status quo Industrial policy

Within manufacturing, the automotive industry received about 45% Industrial incentives do not create new jobs
of the approved funds, while the chemical products, pharmaceuticals
and plastics subsector received about 25.1% of the approved funds, The country’s industrial policy has a number of financial supports for
compared to just 2.4% for the Clothing, Textiles and Footwear subsector. targeted sectors, including the 12i tax allowance, the Manufacturing
So fewer projects are funded in sectors that employ more womxn, and Investment Programme, and the Manufacturing Competitiveness
where womxn are more likely to own businesses. Enhancement Programme. Assessments of these incentives have
found that:
In 2018, R7.9 billion was approved for black industrialists. However,
womxn-empowered business (with at least 25% of ownership in the • 12i tax allowance is a tax allowance for new firms. The allowance led to
hands of womxn) received a smaller portion of funding support from the large investments, whose value was at times “twice the tax allowance,
IDC, approximately R2.2 billion, as mentioned above. [but] the projected number of jobs [compared] to the tax incentive was
very low”. The sectors benefiting were predominantly capital intensive
Thus, perhaps the biggest let-down of industrial policy lies not in the [such as chemicals]
state’s unwillingness to elevate and fund sectors where womxn are
located, but rather the failure to recognise that to address the fact of • The Manufacturing Competitiveness Enhancement Programme provides
womxn’s economic marginalisation requires an intentional setting of grants and loans to promote job retention and competitiveness of
targets and creation of projects to uplift womxn, similar to the work of the firms. Its budget of R5.75 billion had all been allocated to projects by
Black Industrialist Scheme (BIS) whose creation was aimed at addressing 2015. More than half of the approved financial support was targeted
the lack of black industrialists in the country. Furthermore, funding at labour intensive sectors - metals and agro-processing - but the
levels for projects aimed at womxn’s business empowerment need to be majority of the funds (75%) was targeted towards buying machinery,
improved beyond the R16 million allocated for the Isivande Womxn’s Fund, and less than 20% towards enterprise level improvements (e.g. skills
or the R11 million allocated for the South African Womxn’s Empowerment development).
Network, for instance.

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D - How the state’s microeconomic policy and practice maintains the status quo Industrial policy

• The Manufacturing Investment Programme is a grant programme in policy must not allow retailers to control the value chain from production
which R2.4 billion was invested between 2012-2015 resulting in the to selling, and to thus use their economic power to unfairly block the entry
retention of 150 662 jobs. of small scale producers.

Competition policy has not opened market access for small Mondliwa and Roberts identify several examples of how big firms use their
and new firms economic power to unfairly block rivals and keep profits high:
• in liquid fuel, the major oil companies have long had regulations which
The current structure of our economy rewards established big business and
allow them to control off-loading facilities at ports, storage facilities
blocks SMMEs (Small, Medium and Micro Enterprises) and new enterprises
and access to pipelines;
from entering and thriving in the market. Established big business can
use its economic power to block SMMEs “by lobbying for policies and • in telecommunications, Telkom has persuaded policy makers to
regulations that make it difficult for rival firms to enter the market”. This support its privileged position in the name of extending access;
explains why the economy has not performed well and remains so unequal.
• in pay TV, there has been strong lobbying to pass regulations which
Competition policy currently focuses on the enforcement of rules against stop potential rivals; and in beer distribution and sales, SAB-Miller
collusion (when rival companies agree to keep prices up, as happened (now ABInbev) headed off changes to the Liquor Act which would have
with bread prices recently) and excessive pricing. opened up distribution to rivals (although some concessions were
later granted during the process of getting approval for their merger).
But there is still a need for competition laws and policies to be used to
open up markets to include more participants. For instance, competition

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D4
D - How the state’s microeconomic policy and practice maintains the status quo Political and Corporate capture as a driver of inequality

Political and
corporate capture
as a driver of
inequality

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D - How the state’s microeconomic policy and practice maintains the status quo Political and Corporate capture as a driver of inequality

Political and corporate capture

as a driver of inequality
Inequality is bad because it ensures that those that have money and power, Traditional authorities regulated access to land. Black politicians and
are able to influence policy and decision making in a way that makes them administrators regularly turned these resources to personal enrichment
more rich at the expense of the poor. In recent years “state capture” and and patronage, providing for the apartheid regime a measure of social
“corruption” have become buzz words in South Africa. A series of high- control. Moreover, towards the end of apartheid, companies would make
profile cases including those involving former President Jacob Zuma and profits from illegally taking money out of the country (defying international
his ties to the Gupta family have shone a light on the political capture of sanctions applied against businesses in South Africa).
public resources. But are these high-profile cases a symptom of a deeper
The Politicisation of the Post-Apartheid Civil Service in early Post-
problem? When we look at what happened in apartheid and what happened
Apartheid South Africa
just after apartheid, we see that political and corporate capture of public
resources is not a recent event, but rather it is systemic. Such capture As apartheid fell, ending one kind of political capture – white privilege –
makes powerful instruments such as local procurement, ineffective. Local became a high priority. Another form of political capture – apartheid-era
procurement, or buying from local producers of goods and services rather patronage networks – would be strengthened as a way to combat white
than cheap imports has helped other countries develop an industrial base privilege, and to provide resources to an impoverished population.
that employs people and reduces inequality. Therefore, to be successful
Apartheid was not a free market system. The relatively large apartheid
at developing an economy that can cater to our most basic needs requires
state and its reliance on its civil service officials were among its core
that we tackle our crisis of governance.
elements. As the ANC and its allies took over in 1994, a question arose:
Political and Corporate Capture existed in Apartheid How could the civil service be made not only more racially diverse but also
be compelled to make decisions that would benefit the least privileged?
The apartheid system was all about political and corporate capture. A
person’s employment and ability to provide for themselves and their The answer unfolded between 1994 and 2000. First, as older white civil
families was based on their race and gender. Apartheid used a system servants left their posts (employment law protected them from simply
of patronage to enforce political and economic control over the masses. being fired) new positions were removed from the purview of the Public

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Service Commission. The Commission would, due to changes to the law in This sounds great in theory. In practice, the system is rife for misuse.
1996 and 1997, only play a role as an oversight, advisory and grievance body. Politicians can favour whomever they choose, for good reasons or bad,

“
By loosening this significant, constitutionally independent check on the and those favoured may be expected to repay the politicians in question.
President and ministers, on premiers and members of provincial executive In other words South Africa has a patronage system not unlike those of
councils, the scope for politicisation in the national and provincial public other countries, but specifically justified in terms of undoing the legacy of
In 2018 66% of registered
service was dramatically expanded. In municipalities, councillors and apartheid. The apartheid legacy coupled with the changes to the law in the suppliers were B-BBEE Level
mayors gained wider powers over appointments and operations under the early post-apartheid period (long before Jacob Zuma became President) 1, the highest level possible.
Municipal Systems Act of 2000. created a deeply uneven patronage system. Many local governments 57% of suppliers were majority
effectively function as fiefdoms with ordinary people dependent on good black-owned. 22% were
One result of these changes is that politicians have a large degree of control majority black womxn-owned.
relations with local leaders for food, jobs (in the public and private sector),
over civil servants. The most senior management posts, with notable In the last eight months of
legal assistance and much else that they need.
exceptions in core national institutions such as the National Treasury, 2017, 36% of national and
are filled in accordance with political criteria. Political appointments of Layered on top of the patronage system are policies like Broad-Based provincial budgets went to
senior managers helps to introduce political criteria over merit in lower Black Economic Empowerment (B-BBEE) which are designed to ensure that B-BBEE Level 1 companies and
positions. Therefore, the whole administration from the top to the bottom governments can only do business with companies that are implementing 75% went to companies that
is politicised. a form of multi-racialism. In 2018 66% of registered suppliers were B-BBEE
Level 1, the highest level possible. 57% of suppliers were majority black-
were at least Level 4.
“
It was believed that this result could ensure that the civil service as a
owned. 22% were majority black womxn-owned. In the last eight months
whole would be committed to multi-racialism and poverty alleviation.
of 2017, 36% of national and provincial budgets went to B-BBEE Level 1
Thus it falls largely on the governing ANC and its allies to see that their
companies and 75% went to companies that were at least Level 4.86
representatives make decisions that transform the civil service into an
engine of multiracial development.

86
National Treasury. 2018. State of Procurement Spent in National and Provincial Departments. < http://ocpo.treasury.gov.za/Resource_Centre/Publications/2018%20State%20of%20procurement%20spent.pdf >; National Treasury. 2018. State of Government Suppliers. < http://ocpo.treasury.gov.za/
Resource_Centre/Publications/Report%20State%20of%20Gov%20Suppliers%20Report.pdf >.

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To the extent that these policies and the patronage system more generally Africa could well have made progress towards its development and

“
have created a more diverse South African workforce, they are to be industrialization objectives had there been better compliance with these
applauded. But South Africa as a whole is even more unequal (in economic regulations.
terms) than it was in 1994. In practice these policies have not allowed for
State Owned Enterprise: Case of Transnet
The Department of Trade and the creation of a more equitable South Africa. If anything, they may be
Industry reports that between contributing to the diversification of the most privileged class. That is not The Department of Trade and Industry reports that between March 2015
March 2015 and July 2017, necessarily a bad thing, but it is far from the vision South Africans were and July 2017, nearly R59.95-billion was ‘locked into the country’ under
nearly R59.95-billion was promised as apartheid ended 26 years ago. local content designations. Only 4.43% of this amount, or R2.66-billion was
‘locked into the country’ under verified.88 Most of the remaining R57 billion went to Transnet’s R50-billion
local content designations. Worse yet, there is a threat that resources desperately needed for
plus purchase of 1064 rail locomotives, which has come under scrutiny by
Only 4.43% of this amount, development are being diverted to benefit a few who might be misusing a
or R2.66-billion was verified. investigative reporters, public regulators, and the Zondo Commission of
patronage system that could – despite its problems – serve a constructive
Most of the remaining R57 Inquiry. The hard evidence that has emerged from these quarters follows
role. As Cambridge economist Ha-Joon Chang has documented,
billion went to Transnet’s a pattern that can be discerned at smaller scales in such areas as the
development has only ever occurred through a collaboration between the
R50-billion plus purchase of purchase of solar water heaters for public houses (R450 million of local
1064 rail locomotives, which state and the domestic private sector. As such, government procurement
content reported).
has come under scrutiny by policies are important tools to boost industrialization, which is the key
investigative reporters, public to the creation of more and better jobs, which in turn is key to overall Transnet’s board and CEO are formally appointed by the Minister of Public
regulators, and the Zondo
Commission of Inquiry.
“ development.87
Political and Corporate Capture undermines employment generating
Enterprises with the concurrence of Cabinet. By 2011, Zuma and Gupta
associates were finding their way into strategic positions in Transnet’s
board and senior management. Despite the existence of some local
Industrial Policy
manufacturing capacity, Transnet would contract with foreign firms,
Unfortunately, South Africa only began to link its procurement policy to including General Electric, Bombardier Transportation, China North Rail
the promotion of domestic industries in 2011 through the Preferential and China South Rail, which entered into joint ventures with local, front
Procurement Regulations. But even with this late starting date, South

87
Chang, Ha-Joon. 2010. Bad Samaritans: The Myth of Free Trade and the Secret History of Capitalism. Bloomsbury Publishing.
88
Department of Trade and Industry. 2018. Industrial Policy Action Plan, 2018/19 - 2020/21. < https://www.gov.za/sites/default/files/gcis_document/201805/industrial-policy-action-plan.pdf >

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companies without a history in locomotive construction. Prices were councillors, being in principle legitimate representatives of communities,
misrepresented and then inflated. are well-positioned to insinuate themselves into the role of mediating
this relationship. Operatives are formally encouraged to run impartial
No one knows exactly how much money was lost or stolen on the Transnet
processes such as lotteries and rotations, but councillors – often through

“
deal, but for the moment let us suppose that the amount was about R10
force or fraud – have often secured for themselves substantial contract
billion (which seems reasonable given that the overall project budget
and job patronage.
increased from R38.6 billion to R54.5 billion in what amaBhungane calls
the “Gupta premium”89). Calculating an average wage of R60 per hour, that The relevant councillor may be more or less controlled by their branch No one knows exactly how
R10 billion could have provided some 73,102 year-long jobs. executive committee and powerful persons therein. They will themselves, much money was lost or
or through their appointed community liaison officer, maintain lists of stolen on the Transnet deal,
Where it has mattered most, South Africa’s local content programme but for the moment let us
community suppliers and workers for purposes of making recommendations
has been wholly dysfunctional. Political manipulation of personnel and suppose that the amount
to main contractors. Community development is theoretically conceived was about R10 billion (which
procurement processes has likely had severe detrimental consequences
of as a sort of democratic and universalist welfare and empowerment seems reasonable given that
for industrial development and job creation.
mechanism, but under the influence of this kind of political control and the overall project budget
Public Works Programmes patronage it often changes into an unpredictable and exploitative form increased from R38.6 billion
of short-term workfare. Beneficiaries are not paid very well. They are to R54.5 billion in what
This is one high-profile example of the patronage system gone bad, but amaBhungane calls the “Gupta
commonly required to tithe a portion of the meagre benefit received
even at a more mundane level there is little to suggest that the system premium”89). Calculating
back up to the politician who distributed it. Participants in fieldwork
benefits South Africans. South African municipalities generally try to an average wage of R60 per
have sometimes reported that such tithing is required, for instance, of hour, that R10 billion could
distribute public works evenly across areas and wards, although fairness
can run up against the constraints of technical efficiency and party and
factional competition can creep into decision-making. Once in wards,
EPWP (Expanded Public Works Programme, an employment promotion
programme) workers. Under the current ministerial determination, these
have provided some 73,102
year-long jobs.
“
workers earn a minimum of R92.31 a day, and in South Africa’s eight largest
main contractors subject to set-aside requirements (money earmarked
cities they earn an average of around R150.
for investment in local businesses) must find a way to work with
communities, at least to identify eligible sub-contractors and workers, Research readily turns up reports from the ground about how political
but really as a way to deal with any number of other contingencies. Ward opponents of the governing party risk being shut out of the small but

89
amaBhungane. 3/6/2018. ‘The R16bn “Gupta premium” - how the Transnet locomotive acquisition went from R38.6-bn to R54.5-bn.’ Daily Maverick < https://www.dailymaverick.co.za/article/2018-06-03-analysis-the-r16bn-gupta-premium-how-the-transnet-locomotive-acquisition-went-from-r38-
6-bn-to-r54-5-bn/ >

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needed resources that community development projects might provide. of non-compliance increasing if no action is taken to rebuild trust in the
New political movements that come to confront local politicians often have fairness of our tax system.

“
their leadership co-opted and their ranks divided by offers of community
The Free Market will not save us
development sub-contracts and jobs.90 These effects of patronage
politics extend well beyond community development to affect unions and Unfortunately, most criticisms of South Africa’s patronage system throw
The Department of Trade and the baby out with the bathwater. Mainstream criticism creates a false
other social movements, and indeed the ANC itself.
Industry reports that between
dichotomy between the “corrupt” patronage system and a “pure free
March 2015 and July 2017, Effects of Political and Corporate Capture on Tax Base
nearly R59.95-billion was market system”. Some proponents of this view also emphasize foreign
‘locked into the country’ under Another interlinked problem has been revealed by the State Capture direct investment and the idea of corporations – whether South African or
local content designations. scandal, as analysed by the Alternative Information and Development foreign – being a less corrupt road to development.
Only 4.43% of this amount, Centre91: corruption. What some have defined as a public-private
or R2.66-billion was verified.
There are many problems with this story. First, the story of political
partnership between corrupt officials and business interests, is
Most of the remaining R57 capture explained above involves relations between the state and
dangerously threatening public finances and the sustainability of our tax
billion went to Transnet’s corporations, sometimes multinational corporations. The Transnet story
system on many fronts; it has used the same loopholes as illicit financial
R50-billion plus purchase of is one such example where domestic and foreign companies both seem to
1064 rail locomotives, which flows.
be implicated. Second, according to Global Financial Integrity, trade mis-
has come under scrutiny by There has been a profound lack of public oversight over tax authorities invoicing and other common corporate practices costs South Africa an
investigative reporters, public estimated 7.4 billion US Dollars (R110 billion) per year in lost tax revenue.
“ in South Africa that led to the erosion of SARS capacities. In fact, the
regulators, and the Zondo
shortcomings of revenue collection have meant R141 billion in losses, not Most of these mechanisms may be technically legal, but corporate profit
Commission of Inquiry.
taking into account any of the rigged contracts that were often overpriced hoarding in the form of tax avoidance costs South Africans on a scale
and sometimes useless. comparable to if not in excess of money lost to leakages and kickbacks
within the patronage system.
This illustrates the impact a political faction had by dismantling key
investigative units. Without an independent nonpartisan body being able The other problem with seeing a “corrupt” status quo in opposition to a
to oppose such a move, the fertile ground for corruption characterised “free market” alternative is that it implies that South Africa should open up
by secrecy in the tax system will not be rooted out. Not only is the short its economy to competition from international competitors. The problem
term stability of our tax system at stake, but overall there are huge risks with this approach is that countries or regions that are much further along

90
For similar arguments along these lines see Claire Bénit-Gbaffou. 2011. ‘“Up close and personal” – How does local democracy help the poor access the state? Stories of accountability and clientelism in Johannesburg,’ Journal of Asian and African Studies, 46 (5), pp. 453–65; also Beresford, op cit.
91
Submission to the Zondo Commission of Inquiry - The Tax Consequences of State Capture and reform proposals, May 2019

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in the development process – the USA, Europe, China and Japan to name often involve a nexus of politicians, civil servants, and local contractors
a few – will enter into trade agreements with South Africa that will force and sub-contractors. The result is a state where political and corporate
South African companies to compete with much more mature foreign capture has been institutionalized. The solution should not be a return
industries. The predictable result is further de-industrialization and even to “free markets” (which will only exacerbate the problem) but rather
more job losses as foreign goods further displace South African products better enforcement of existing conflict of interest policies and ensuring
in the market.92 This is already happening; thousands of jobs have been that civil servants are on the one hand no longer beholden to politicians
lost in the first quarter of 2020 alone due in part to the opening up of and on the other in no way able to gain personally from monies allocated
South African markets.93 for development.
In conclusion to the chapter, the South African government is actively
working to enshrine the status quo on multiple levels. Formal sector jobs
are being displaced by precarious work and contract jobs to circumvent
labour laws. This benefits corporations interested in their own bottom
line, and is being facilitated by the State which has undermined the role
of labour unions and has not taken adequate measures to ensure a living
wage for all, including womxn. Womxn especially bear the brunt of policies
that punish those who work in the informal sector, including traders who
do not have adequate access to markets. To the extent that South Africa
does have an industrial policy, it does not create adequate jobs, or jobs
that are well paid. Money invested in industrial policy is often wasted
through poorly designed incentives and when jobs are created they are
usually jobs in sectors dominated by men without creating incentive for
womxn participation in these sectors. Lastly, the schemes that were
designed by the ANC in the early post-apartheid period to empower black
workers and black-owned businesses in less populated and remote
areas have been expanded and misused to create private fiefdoms that

92
Chang, Ha-Joon. 2002. ‘History Debunks the Free Trade Myth’. The Guardian, 24 June 2002, sec. Business. https://www.theguardian.com/business/2002/jun/24/globalisation.
93
Staff Writer. 16 Jan 2020. ‘South Africa’s Jobs Bloodbath’. Accessed 18 February 2020. https://businesstech.co.za/news/business/366636/south-africas-jobs-bloodbath/.

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D5
DD -- How
How the
the states’s
state’s microeconomic
microeconomicpolicy
policyand
andpractice
practicemaintains
maintainsthe
thestatus
statusquo
quo Taking the fight into the policy
Industrial future

Taking the
fight into
the future

127
Inequality Report 2020 Inequality Report 2020
127
D - How the state’s microeconomic policy and practice maintains the status quo Taking the fight into the future

Taking the fight

into the future
Unlike in the 1970s and the 1980s, when worker organisation focused on frontiers of inequality will require the recognition and validation of the
male migrant workers, in post-apartheid South Africa the feminisation of existing struggles against social and economic inequality such as these
work and migration will require an emphasis on organising black womxn, described below.
who face oppression as womxn in households and as womxn workers
Under neoliberalism, government and the Department of Health tended to
in the workplace. A strategy for organising precarious workers will also
shift the burden of care from the state to black womxn who are already
have to allow for the fact that migrant workers, who are also frequently
carrying a huge burden in their households as carers who are mothers in
black womxn, are part of the South African workforce who also need to be
the context of generalised patriarchy. Community health-care workers are
organised.
generally black womxn who take care of their families as well as patients
There are lessons to be learnt from the 1980s and the early 1990s. For in hospitals and clinics. In many instances, these workers were hired by
example, SACCAWU highlighted demands and issues related to womxn NGOs and earned only stipends. Although they did crucial work within the
and reproductive rights such as maternity leave, parental and other rights public system, such as looking after HIV-positive patients, and worked a
intended to ease the burden on womxn. Lessons from gender struggles normal work week, they were regarded as volunteers by the Department
waged by womxn belonging to SACCAWU could help to formulate demands of Health.
by precarious workers. Formed in 1975 and largely comprised of black
Led by the Gauteng Community Health Care Workers Forum, which is
womxn, and despite tendency of patriarchy within the union, SACCAWU
comprised largely of black womxn employed as community health-
is known for its struggles for the rights of womxn workers, such as paid
care workers, community health-care workers servicing communities
maternity leave94.
in Gauteng were declared to be permanent workers of the Gauteng
Precarious workers and workers in general, unionised or non-unionised, Department of Health by Advocate James Matshekga from the Public
have been constantly engaged in overt and hidden struggles for decent Health and Social Development Sectoral Bargaining in 2018.
work, better working conditions and a living wage. Pushing back the

94
Appolis, P., 1998. Workers as fathers. Agenda, 14(37), pp.78-81.

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The legal victory was preceded by intense organising, popular and political organising, education and mobilisation. This court victory could help to
education, education about workers’ rights and other forms of support by improve wages and working conditions of labour brokered workers97.
activists based at Khanya College since 201095.
The student uprising which was dubbed ‘Rhodes must Fall’ began in
After three and a half years of legal battles between NUMSA and Assign 2015 when student activists at the University of Cape Town and other
universities challenged the colonial symbols and generalised racism at

“
Services (Pty), a labour broker, the Constitutional Court, the highest court
in South Africa, ruled that, in cases of labour brokering: universities. In the same year, from October to November, more universities
became involved and began to call for free higher education, a movement
“…the dual employer interpretation is the correct one. The … provision
Most of the outsourced called ‘Fees Must Fall’. In the process, student activists supported what
creates a statutory employment relationship between the employee
workers were black womxn, had often been low-key but ongoing struggles against outsourcing of
and the client. But it does so in addition to the existing employment
often single parents, who universities’ services, which began in the 1990s.
worked as cleaners. Between relationship between the employee and the labour brokered worker and
2016 and 2017, several not in substitution thereof. I would accordingly uphold the appeal96. Most of the outsourced workers were black womxn, often single parents,
universities agreed to end who worked as cleaners. Between 2016 and 2017, several universities
In 2015 the LRA was amended to say that precarious workers hired by
outsourcing, and in many agreed to end outsourcing, and in many instances, workers won wage
instances, workers won wage “ temporary employment agencies or labour brokers who have worked for
increases close to 100%. In addition, certain benefits were granted, such
increases close to 100%. more than three months must be made permanent workers of the client
as allowing the children of workers to access universities. The momentum
company. As discussed earlier, these provisions only cover workers that
gained from the student uprisings added to the low-key struggles that
earn below R205 433.30. Therefore workers earning above the threshold,
had been waged by workers dating back to the 1990s to make it made it
such as professional nurses, are not afforded the protections.
possible for workers and student activists to end outsourcing within a
There were many instances where employers use labour from labour short period of time of a few months98.
brokers for work that is permanent in nature and often performed on the
The campaigns waged by precarious workers in universities, in workplaces
premises of a client company. The result of this is that labour-brokered
and in communities have shown that organising womxn and building a
workers earn low wages and do not enjoy the rights granted to workers of
layer of a cadre of womxn organisers should be one of the major tasks,
a client company. Workers hired by labour brokers who have been working
as womxn, particularly black womxn, are affected by precarious work on
for more than three months for a client company can now approach
a large scale. Related issues which require attention include demands for
the CCMA to access this right. However, realising this right will require
a living wage, struggles against sexual harassment, and the promotion

95
Khanya College. 2018. Forum Wins Permanent Status for CHWs in Gauteng. 18 December 2018. http://khanyacollege.org.za/forum-wins-permanent-status-for-chws-in-gauteng/
96
Assign Services (Pty) Limited v National Union of Metalworkers of South Africa and Others (CCT194/17) [2018] ZACC 22; [2018] 9 BLLR 837 (CC); (2018) 39 ILJ 1911 (CC); 2018 (5) SA 323 (CC); 2018 (11) BCLR 1309 (CC) (26 July 2018). Assign Services (Pty) vs NUMSA: paragraph: page 36.
97
NUMSA. 2018. “NUMSA wins landmark Constitutional Court decision on labour brokers!” 26 July 2018, https://www.numsa.org.za/article/constitutional-court-judgment-on-labour-brokers/
98
Luckett, T. and Mzobe, D., 2016. # OutsourcingMustFall: The role of workers in the 2015 protest wave at South African universities. Pp 94 – 99.

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of health and safety for womxn workers. Decent working conditions and Socio-Economic Rights Institute (SERI), and Oxfam South Africa launched
improved benefits for womxn will be central demands in the struggle in October 2018. The campaign emphasises the important role and
against precarious work. The state must make sure that it provides quality contribution of domestic workers not just in people’s homes, but also to
social services to minimise the social and economic burden placed on South Africa’s workforce and economy – but with little recognition, value
black womxn and precarious workers. One of the womxn workers who and pay.
works at Wits University as a cleaner had this to say:
The #DWRising campaign kicked off with galvanising public support

“
for the Sylvia Mahlangu’s case (Mahlangu v The Minister of Labour)
which seeks to get domestic workers included in the Compensation for
“These companies don’t pay us enough, we have needs that
Occupational Injuries and Diseases Act (“COIDA”) 7. Ms. Sylvia Mahlangu is
are not met because we get peanuts, needs like buying food “ the daughter and sole dependent of Maria Mahlangu, a domestic worker
and paying transport fare for my kid, like I said before I pay a lot
who was reported to be dead on the morning of 31 March 2012, at her
of money, I would pay R800 a year for school fees.”
employer’s home in Faerie Glen, Pretoria. It is alleged that Maria, who
was partially blind, slipped and fell into her employer’s pool, where she
later drowned. Ms. Mahlangu challenged the constitutionality of section
Given the decline in services like health, education and social welfare, and
1 (xix) (v) of COIDA 130 of 1993 to the extent that it excludes domestic
the fact that the burden of care is carried by womxn, social movements
workers employed in private households from the definition of “employee”
and community organisations will have to build alliances with precarious
and therefore from compensation. After years of challenge these are
workers to make sure that the state, in consultation with communities
some of the achievements of the campaign: A court ruling which found
and precarious workers, makes it possible for children of workers to
that the exclusion of domestic workers from COIDA was unconstitutional,
access state-funded basic services like early childhood development
opening the way for greater inclusion of domestic workers in labour
services and education in general. In addition, access to water, electricity,
rights legislation. Mobilisation of domestic workers around the struggle
effective public transport and other services will go a long way towards
for inclusion in COIDA, increasing their knowledge of their labour rights.
improving the lives of workers, especially precarious workers.
Increased public support for, and recognition of, the struggles of domestic
Domestic Workers Rising (#DWRising), which has been supported by the workers for full labour rights. The digital campaign launched in October
South African Domestic Service and Allied Workers Union (SADSAWU), The 2018 gained over 50,000 impressions in just three months.

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The Xolobeni community, situated on the Wild Coast, in the Eastern Cape
Province has been for over 15 years locked in a battle with Transworld Energy
and Minerals Resources from Australia, which wants to acquire a mining
licence for titanium-bearing minerals in the area. Transworld Energy and
Minerals Resources (TEM) is owned by Minerals Resources Commodities
(MRC). MRC’s main shareholders are; Caruso Brothers (Exec Chairman and
non-exec Director at Tormin mine), Graham Edwards (also owns a property
outsourcing and investment business in the United Kingdom) and other
smaller shareholders. The Xolobeni community won a major court battle
after years of struggle which included several assassinations and
death threats. The Judge ruled that the community has the right to say
no to mining in line with the Interim Protection of Informal Land Rights
Act (IPILRA). Beyond the legal right, the community resists this form of
development citing their activated agricultural fields, grazing lands,
harvests from natural resources among other wider livelihoods benefits,
which outweigh envisaged mining benefits.

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E - What could we do instead? OZA’s recommendations

What could we
do instead? OZA’s
recommendations

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What could we do instead? OZA’s

recommendations
How do we shift the tide away from an economy made In summary
for the billionaire class? Oxfam South Africa working South Africa’s inequality is extreme and stubbornly high. This report has
with its partners believes that an economy that meets shown that inequalities across economic and social outcomes correspond
to the persistent four lows, low employment levels, low investment, low
the basic needs for all, which does not privilege men
productivity and low levels of social provisioning (other than social grants)
over womxn, a certain class and race group over that are underpinned by a skewed economic structure which has its roots
another is still possible. We are committed to building in the political economy of apartheid industrial development. The South
a People’s Economy that is fair, ensures the right to African economy in 1990 was heavily skewed towards capital intensive
economic activities connected to extractive industries, and ownership
dignified, secure, safe work and fair pay. No one would was heavily concentrated in six diversified conglomerates.
live in fear of the cost of falling sick. Every child would
In the first decade after apartheid, industrial policy was subordinated to a
have the chance to fulfil their potential. Our economy neoliberal macroeconomic framework that was informed by conglomerate
would thrive within the limits of our planet, and interests. The conglomerates wanted to globalise and financialise through
hand a better, more sustainable world to every new unbundling, overseas listings and offshoring. This process involved the
promotion and co-option of a new black capitalist elite through BEE,
generation. whose interests were also aligned to conglomerate capital. This period
It is clear that the current policies are not working to lessen inequality. saw the collapse of labour-intensive manufacturing and stagnant capital
What can be done instead? These are the recommendations that Oxfam investment, and apartheid patterns of investment continued, further
South Africa intends to put forward and campaign around. These are not entrenching the skewed industrial structure.
prescriptive: you and your organisation are welcome to take up some or
Macroeconomic policy promoted trade liberalisation, leading to increased
all of these recommendations in your campaigns, but you are equally
imports and unsteady export earnings. Consequently, the country was
welcome to develop your own demands and policy recommendations. We
importing more than it exported, and government managed this by
hope that this report will help you to develop demands and solutions that
strongly defending inflation-reducing measures (which depress wages)
work for you.
and keeping interest rates high to attract short term investment. Short-

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term portfolio inflows are a source of instability and have financed the
expansion of the financial sector, fueling inflation in the price of assets
(such as the property market), and restructuring of the financial sector False solutions: more black womxn CEOs
to serve financialised accumulation rather than long-term investment in On page xx, we showed how the rise of a handful of black people
productive activities. into top ranks via BEE since the end of apartheid only increased
South Africa’s economic path and policy making have been dictated by inequality amongst black people, without reducing inequality
globalisation, financialisation, neoliberalisation serving the interests overall and without challenging the structural causes of inequality
of capital and elite enrichment. This is evident from tensions between, The widening gap between rich and poor men, which grew faster
on the one hand, the Treasury, which remained committed to neoliberal than the gender gap in recent times, also suggests that there is
macroeconomic policies, and on the other, the Department of Trade and little gender solidarity across classes.
Industry and the Economic Development Department, whose efforts to
develop industrial policy have been severely limited Policy has become
centralised under presidential and treasury control, stifling coordination
of industrial policy. National Treasury has revived its austerity measures
that will result in job losses and continue a declining economy. False solutions: Black industrialists
Income inequalities have been amplified by persistently high levels of Black industrialists have simply fitted into some spaces in the
unemployment, worsening conditions for informality, uneven sectoral existing structure of the MEC, as discussed on page xx [HOW
patterns of employment and pay, as well as highly unequal relations THE MEC SURVIVED APARTHEID’. They have relied on the same
between different income groups and the financial sector. exploitative methods of precarious work and low wages to boost
Addressing the crisis of inequality in South Africa needs to go much further profits. Though none of them have come close to the Ruperts
than the labour market reforms and skills development policies that have yet, they have all joined the same game on the MEC playing field,
been advocated by mainstream economists. Labour market reforms must and they have therefore, consciously or otherwise, relied on
be geared towards workers’ protection and fair pay and benefits across continuing and increasing black workers’ exploitation just as any
sectors. This would involve a sufficiently high national minimum wage other industrialist has. Reducing inequality requires a new and
together with a cap on maximum income that could deal with unequal different economic structure, not merely changing the colour or
distributions of income according to sector, skill and gender. Further, gender of those at the top.
long-term socially sustainable distributions of income would require the
radical transformation of the economy towards more labour intensive,
linked sectors that serve the needs of the population - for example via a
developmental welfare state across health, education, and so on - rather
than the imperatives of profit and capital export.

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Policy Recommendations for

Dignified Work for Womxn and All

for the promotion of sustainable and equitable economic development.

R This would require a wide set of policies that are mutually supportive
A living wage and a cap
on maximum income that include:
Target full employment: full employment must be the key target of
macroeconomic policy and the possible replacement of the interest rate
Labour market reforms must be geared towards workers’ protection, fair pay
by the exchange rate as a policy tool since adjustment costs of raising
and benefits across sectors. Currently CEOs in South Africa are amongst
interest rates may be carried more by sectors sensitive to interest rates
the most highly paid in the world which contributes to a high wage pay
that include manufacturing.
gap. Therefore, provisions made in Section 27 of the Employment Equity
Act for the reduction of the pay gap between the highest paid employee Capital controls on short-term capital inflows: controls on short-term
and lowest paid worker should be applied across race and gender. This will capital inflows would reduce sources of fluctuations in exchange rate
grow the economy because workers will have more buying power which and asset prices directly and by reducing the amount of short-term funds
stimulates production and employment growth. channelled towards purely financial investment.
Sectors that have a lower minimum wage in comparison to the national Financial sector geared to long-term productive investment: this should
minimum wage such as EPWP workers, domestic workers and farm workers be done through regulation, such as a separation between commercial
must also be in alignment with the national minimum wage level. and investment banking, and through state-led development of a large
green industrial development bank that finances productive activities
at different scales. The key to a successful strategy is the integration
of macro, financial, welfare and industrial policy serving a common
A macroeconomic policy that policy goal.
serves employment creation
and inequality reduction Prescribed assets: this policy lever was used under apartheid to mobilise
domestic resources that were re-invested in a range of infrastructure and
Macroeconomic policy must be re-orientated away from the service of public corporations which was critical in the development of the economy.
capital outflows and expansion of the financial sector in and of itself. This entails the requirement that financial institutions invest a fixed
Rather, both macro and financial policies need to be in the service of portion of their funds that into a government bonds that will be used for
industrial policies aimed at the radical restructuring of the economy public investments in job creating key industries and the care economy.

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create a public registry of beneficial ownership where beneficial owners

list all property titles both real and financial assets; MNCs tax practices are
Fiscal Tax Justice made transparent by forcing them to disclose their tax practices in South
Africa and in other countries worldwide; and implementing a specific tax
regime for mining and digital services.
In spite of South Africa’s progressive tax system (i.e. the richer you are the
Similarly, adopting stricter rules to bring back to our national tax net
more you are taxed), we have seen creeping regressive taxation. Therefore,
multinational entities must be implemented both locally through the
there is room to improve the redistributive impact of our tax system.
adoption of new tax avoidance rules, and internationally by promoting an
Re-establishing progressive direct and indirect taxes for PIT and VAT ambitious reform of the currently broken international tax system.
Wealth tax: the taxation of accumulated wealth. Not only does it have the
potential to contribute positively to the reduction of inequalities today, but
by limiting for the wealthiest South Africans the capacity to accumulate
tremendous wealth, it has a big potential to boost long term transformation Tackling Political
of wealth ownership patterns and revenue flows. and Corporate Capture
Tax expenditures and tax breaks: clearly, the massive amounts at stake lead
us to question: are those tax breaks useful and for whom? A close oversight
of such tax breaks shows the reform of the health tax credit seems to be
There are compelling grounds for a process of appropriately insulating and
the most urgent one, especially in the context of the implementation of an
professionalising South Africa’s public administration. What this will require,
ambitious national universal health care system.
centrally, is the institution of an independent check which works to prevent
Non-compliance, tax evasion and tax avoidance: there is a need to tackle politicians from introducing partisan political criteria into appointment
non-compliance within the tax system at the individual and corporate level. and removal decisions. The Public Service Commission, which enjoys
Companies and wealthy individuals in particular are benefiting from a range constitutionally-entrenched independence and can reach into provinces, is
of public investments in infrastructure and unpaid care work without paying the most feasible location for this check. Similar structures can be designed
their fair share of taxes. To improve revenue collections, greater efforts for local governments. For the most senior appointments, to ensure a link
must be put towards enhancing tax transparency, implementing stricter between policy intent and administrative expertise, politicians should
rules and enhancing institutional capacities. This will re-establish trust retain a say in defining the qualifications and capabilities to be selected
and confidence in our tax system, rule out the risk of corruption and prevent for. Representivity, in relation to the demographics of the country, can and
complacency from tax authorities. This can include practices such as: should remain an important criterion. The Commission, however, should
making individual tax returns public like they do in Scandinavian countries; design and manage the appointment process, checking for applicant

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compliance, administering tests, and constituting selection committees generally low paid. Therefore, the promotion of these industries must also
to conduct interviews which could include political participation. These go hand in hand with improved worker conditions and wages in the formal
selection committees should then score and make recommendations to sector. In the informal sector, industrial policy should also support sectors
political leaders. Politicians should appoint from these recommendations. dominated by womxn, beyond the workshops and mentoring currently
Administrative leadership should take responsibility for appointments lower implemented by government.
down. Removal of administrative leadership should require authorisation
Industrial policy currently identifies and supports ‘growth sectors’ that
by the Commission. These are some of the fundamentals of public
are labour intensive in the manufacturing sector. Industrial policy can also
administrations that are insulated in the right sorts of ways from illicit
incentivise formal sector employers to hire more womxn in industries that
political interference. South Africa’s political machines cannot be taken
have historically been male dominated, as this will improve their earnings
on all at once. Instead, reform should proceed department by department,
potential. However, these industries have also been associated with high
state organisation by state organisation. Pockets of administrative integrity
rates of sexual harassment and poor conditions for womxn. Therefore,
and capacity could, for instance, be established to drive the more vital
enforcement of protections must be strengthened to ensure safe spaces
developmental processes, then expanded from there
for womxn.
Government must mobilise more investment support towards low-carbon
manufacturing. The MEC itself is missing the opportunity to transition to
Gender mainstreamed the metals and minerals that will be crucial for solar, wind, and battery
industrial policies technologies that are making up a greater share of global energy production.
These resources should only be mined in ways that respect workers’ rights
and take into account potential negative effects (like pollution).
Womxn’s economic participation should become part of the core of industrial
policy. Documents such as the Industrial Policy Action Plan (IPAP) should Industrial policy should counterbalance factors that limit womxn
provide policy direction and tangible plans for including more womxn in entrepreneurs’ access to resources and opportunities. Here the outcomes
paid employment and business ownership, in the same way that legislation would be to strengthen linkages to market for businesses owned by womxn
codifies the participation of African people in the mainstream economy by leveraging state investment and local procurement as tools to facilitate
through the BBBEE, so that progress can be monitored and the state held womxn’s access to supply chains. This would require state funding to be
accountable for any failures. directed not only toward start-up costs, but also to fund business skills
development.
Industrial policy should also support sectors in which womxn dominate:
IPAP and the National Informal Business Upliftment Strategy (NIBUS) should There must be monitoring and evaluation of the impact and sustainability
include sectors that employ more womxn. These jobs are important as they to ensure that incentives and supports given by governments’ industrial
contribute to the functioning of the economy and society at large, but are policy are indeed creating dignified work.

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to an increase in income inequality and worsen labour conditions because

Fiscal Tax Justice Enforce labour they make it harder for workers to organise themselves to demand fair
protections for democratic, non- pay and improved conditions. Secret balloting, for example, isolates and
sexist and fair workspaces individualises union members and workers and criminalises strikes so that
workers cannot take collective action to defend their rights. The extension
Policy must be put into practice and into action if it is to make a difference to of conciliation and advisory arbitration both give employers the power to
the lives of millions of workers and to reduce wage inequality. Government prolong the processes towards a strike, thus giving them time to stockpile
must make available the resources necessary to put an end to precarious and prepare scab labour so that production continues during a strike,
work and the mistreatment of workers in general at the hands of employees. thus diminishing workers’ power. Similarly, picketing rules are designed
At a minimum, government must make available at least one labour inspector to diminish the effectiveness of strikes, which are workers’ only clout if
per 20 000 workers as recommended by the ILO: justice unavailable is bargaining fails to reach an agreement.
justice denied. Currently, South Africa has one inspector overseeing more
than 120 000 workers, leaving workers very vulnerable and employers
unaccountable. For instance, employers are still practicing illegal labour Gender mainstreamed
brokering despite a judgement that labour brokered workers must be put on industrial policies
permanent contracts after three months. Employers continue to use sexual
harassment as a weapon of control.
Government must make available resources to strengthen the CCMA so it Womxn’s economic participation should become part of the core of industrial
can process cases more speedily: justice delayed is justice denied. Unlike policy. Documents such as the Industrial Policy Action Plan (IPAP) should
employers, most workers do not have the legal muscle or livelihoods to wait provide policy direction and tangible plans for including more womxn in
for a long process in the case of unfair dismissal. paid employment and business ownership, in the same way that legislation
codifies the participation of African people in the mainstream economy
CCMA must run educational programmes for worker rights and procedures:
through the BBBEE, so that progress can be monitored and the state held
justice unknown is justice denied. Workers must be made aware of their
accountable for any failures.
rights and the procedures to obtain protections against mistreatment.
Industrial policy should also support sectors in which womxn dominate:
IPAP and the National Informal Business Upliftment Strategy (NIBUS) should
Reverse hostile Austerity include sectors that employ more womxn. These jobs are important as they
based Labour Market contribute to the functioning of the economy and society at large, but are
Reforms generally low paid. Therefore, the promotion of these industries must also
go hand in hand with improved worker conditions and wages in the formal
South Africa’s labour protections were once praised for being amongst sector. In the informal sector, industrial policy should also support sectors
the most progressive in the world. Some of the provisions in the amended dominated by womxn, beyond the workshops and mentoring currently
labour bills that came into effect on the 1st of January 2019 will contribute implemented by government.

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Industrial policy currently identifies and supports ‘growth sectors’ that ILO adopted Recommendation 204 (R204) which is largely focused on the
are labour intensive in the manufacturing sector. Industrial policy can also “formalization” of people who work in the informal sector. In most countries,
incentivise formal sector employers to hire more womxn in industries that people who work in the informal sector are at greater risk of being
have historically been male dominated, as this will improve their earnings underpaid, becoming unemployed and are more likely to face dangerous
potential. However, these industries have also been associated with high working conditions. By contrast, the formal sector at least has some
rates of sexual harassment and poor conditions for womxn. Therefore, degree of regulation through labour courts, wage bills, and other regulatory
enforcement of protections must be strengthened to ensure safe spaces mechanisms. But R204 isn’t just about formalisation. Rather R204 sees
for womxn. formalisation as a medium-to-long-term goal which government should
aspire towards. In the meantime, they must respect and advance the rights
Government must mobilise more investment support towards low-carbon
of people who work in the informal sector. That includes the right to safety,
manufacturing. The MEC itself is missing the opportunity to transition to
freedom from intimidation from the police, the right to use public facilities
the metals and minerals that will be crucial for solar, wind, and battery
including toilets, and the right to access markets, i.e. the ability to sell their
technologies that are making up a greater share of global energy production.
goods or services at all. For this reason, Oxfam South Africa is asking the
These resources should only be mined in ways that respect workers’ rights
government to comply with ILO commitments under R204. More specifically:
and take into account potential negative effects (like pollution).
: Government at all levels must address the disconnect between policy
Industrial policy should counterbalance factors that limit womxn
aimed at supporting the informal sector and the continuing harassment and
entrepreneurs’ access to resources and opportunities. Here the outcomes
repression of informal enterprises by police and local officials. At a minimum,
would be to strengthen linkages to market for businesses owned by womxn
informal sector workers should be free from harassment, confiscation
by leveraging state investment and local procurement as tools to facilitate
of goods, and insecure access to space. Ideally, city officials should not
womxn’s access to supply chains. This would require state funding to be
just refrain from harassment but should offer support and regulation as
directed not only toward start-up costs, but also to fund business skills
promised in policy.
development.
Access to markets and fair finance: Existing policy is insufficient even when
There must be monitoring and evaluation of the impact and sustainability
effectively implemented because it focuses too narrowly on characteristics
to ensure that incentives and supports given by governments’ industrial
of enterprises and workers rather than the structure of the economy in
policy are indeed creating dignified work.
which informal enterprises operate, which is governed by big business that
squashes livelihood of new entrants.
Space in malls: Shopping malls do not facilitate the inclusion of informal
Protections and fair access traders and are often built where informal traders previously traded, crushing
to safe markets for informal their livelihoods. Therefore, the design of mall space must integrate and
sector workers include affordable and safe spaces for informal traders as is the case in
other parts of the world.
The International Labour Organization (ILO) is the UN agency tasked with
Competition policy must end big business anticompetitive behaviour: Efforts
laying out and (to an extent) regulating the relationship between business
to reduce conglomerate’s dominance over highly concentrated markets
and labour at the global level. As part of their mandate, in June 2015 the

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would not only benefit the informal sector but could stimulate growth and
innovation in the economy as a whole. Competition policy should therefore Womxn’s unpaid care work and paid work must
be a priority of economic policy. be Recognised, Reduced, Redistributed and
must be represented in policy decision making
Cheap finance: Informal traders’ incomes are low. Some have to resort to
loans from loan sharks, due to increasing costs of living and doing business.
Cheap finance is needed. Womxn spend much more time doing unpaid care work in their most
productive years of life than men. This means that womxn are unable to fully
Social protection must be strengthened to include workers in the participate in the economy which traps them into a life of poverty. The report
informal sector: The informal sector is not a panacea for the problems of also found that paid care work is generally underpaid. Poor black womxn are
unemployment, poverty, and inequality. The low incomes and insecure the most affected by unpaid and underpaid care work. The crisis of care is
livelihoods in the informal sector reflect a broader structural weakness sure to deepen due to government’s austerity policy. There is a need to:
of the South African economy which is currently incapable of providing
dignified work and secure livelihoods for all residents of the country. This Recognise unpaid and underpaid care work as a type of productive work
should include access to unemployment insurance and maternity leave. with real social and economic value.
Reduce the total number of hours spent by womxn doing unpaid care tasks
by investing in the provision of quality universal care supporting public
services.
Social Protection
for all Redistribute the total number of hours spent by womxn doing unpaid care
tasks within the household and also shifting the responsibility of unpaid
care work to the state in the form of quality universal care supporting public
There is a need to make available to working-age people whether employed services; and also work spaces in the private sector (e.g. free day care
or unemployed basic social protections. This must include, for example, centres).
the provision of a universal basic income grant for all. This will increase
the spending power in poor communities, who are the customers of many Represent care givers in the design and decision making of policies at all
informal enterprises and help to stimulate growth in the economy. levels - national, provincial and local government.

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Gender Accountable
and Just Budgeting
and Planning

Governments’ austerity measures on the national budget in the form of

budget cuts and creeping regressive taxation hurt womxn the most. This
is a testimony to the lost momentum in gender responsive budgeting,
or what we call Gender Accountable and Just Budgeting and Planning. A
gender accountable and just budget is a strategic tool to help a feminist
government achieve its policy objectives. The budget process is of key
importance in realising government’s policy agenda and it is therefore
important that budget work is conducted in a manner that includes the
effects and consequences of gender equality when decisions are made
on the direction and distribution of resources. There is a need for gender
accountable and just budgeting to be legislated as part of governments
budgeting responsibility which makes provision for the participation of
broader civic movement including womxn and youth groups. There is also
a need for gender disaggregated data to improve policy making decisions.

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E - What could we do instead? OZA’s recommendations Build your own campaign

Build your own campaign

02
The main aim of this report is to assist campaigning What invisible factors shape inequality in
against inequality. Here we suggest an agenda and our sector? (Brainstorm, then refer to the
an exercise to help plan campaigns against inequality report).
in your sector. Organisations need to build their

03
own campaigns and also seek alliances with others Are there factors from beyond our sector
tackling inequality to strengthen their effectiveness. that affect us? (Brainstorm, then refer to
the report).

04
A proposed agenda
Begin each section with an open discussion. Then use the report to What are our demands
complement what people say. Ideally, everyone should have a copy of the or solutions?
report before the workshop but at least two or three people should be
familiar with the report before the workshop.

05
Use the power analysis below to

01
discuss: Who are our allies, and
Brainstorm: what inequality are we facing?
what are we up against?
a. Where can we see inequality in our own sector or work?
How does it affect us? How does it affect others?
From here, the meeting can decide the form of the campaign, methods to
b. What does the report add to what we know? What do we win the demands, how to raise money or ways to do the campaign without
still need to know that isn’t covered in the report? money, opportunities and risks, and so forth.

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Power analysis Quick Guide to Gender Analysis

Use sticky notes or pieces of paper with Prestick. Give everyone in the What is gender analysis?
meeting three or four sticky notes. Everyone should write on their sticky We all live and work in societies that are permeated by gender differences
notes actors and institutions who will affect our demands, for good or and gender inequalities, which shape the way that decisions get made,
bad. Then each person places the sticky note in one of the nine blocks resources get allocated, and people interact with the world. A gender
below: allies are people on our side, blockers are people/institutions who analysis explores the relationships of womxn and men in society, and the
might stand in our way, and floaters are those who might be pulled to unequal power in those relationships. It brings inequalities to the surface
our side. Decide whether this actor or institution is high, low or medium and to the attention of people who can make a difference.
influence and place the sticky note in the block where the correct row
crosses the desired column. One of Oxfam’s corporate priorities is to address gender inequality through
every aspect of our work (‘gender mainstreaming’). Conducting a gender
analysis is the first stage in this process: it allows us to understand how
High (influence/ poverty affects men, womxn, boys and girls differently, and the differences
power) between poor men’s and womxn’s needs and concerns. Once we have this
information, we can identify what our gender equality goals should be and
design our work in a manner that is sensitive to and reflects the different
Medium experiences and needs of womxn and men.
This is important, first, because more womxn than men suffer from poverty,
so it is a question of justice, or basic rights; and secondly, being aware of
Low the distinct needs and concerns of men and womxn, and acting on this
awareness, means that we can address poverty more effectively. If we fail
to base our work on gender analysis and just assume that our work will
Ally Floater Blockers benefit men and womxn equally, we will reflect and probably re-enforces
the imbalances that exist.

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E - What could we do instead? OZA’s recommendations Build your own campaign

Some basic questions to ask: What information should a good gender analysis provide?
Who has power?
Who owns/controls resources?
The purpose of conducting a gender analysis is to identify the specific
aspects of gender relations and inequalities that are present in your
How to use this report:
Who takes the decisions? programme context, and to examine their implications for programme
design and implementation. It should explore the following areas: • Our main aim is to provide information to strengthen
Who sets the agenda? movements experiencing inequality and against inequality
Who gains, and who loses? The differences in the lives of poor men and womxn;
• By sharpening our picture of the systemic and sometimes
Which men, and which womxn? The barriers that unequal gender relations present to invisible causes of inequality
womxn’s development;
• Others will find information here to build a case against
The status of womxn and their ability to exercise their human rights; inequality in their field of work, policy, or organizing
The different skills, capacities and aspirations of womxn and men; • Readers can and should interact with the data via the
The division of labour: men’s and womxn’s different activities, and their forums at www.oxfam.org.za; @OxfamSA…. Inequality does
access to and control of resources. not stand still, so your interactions will help to keep the
picture up to date and we can inform you when we update
the data
What does gender analysis involve?
This report for popular use was produced by OZA (Oxfam South
There are some basic things that you can do to highlight gender Africa) from papers on different aspects of inequality researched
concerns in any analysis you do: and written by Mondli Hlatshwayo, Ben Scully, Susan Newman,
Disaggregate and analyse the data you collect by sex; Chris Malikane, and Baba-Tamana-Gcubule, Ryan Brunnet,
Alternative Information and Development Centre commissioned
Actively involve womxn, men, girls and boys in data collection, to ensure
by OZA.
that different opinions are heard;
To interact with the report, visit the forums. Our website is
Identify existing sources of information and analysis (e.g. womxn’s
www.oxfam.org.za and FACEBOOK page is Oxfam South Africa or
groups, past evaluations);
twitter account is @OxfamSA
Include gender analysis in terms of reference, and ensure researchers
have the necessary skills.

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A - Dimensions of structural inequality

Design by: GrowCo - Contact: [email protected]

Icons made by: Freepik; Tomas Knop; Wichai.Wi; Kiranshastray; Eucalyp; Surang; Itim2101; Linector; Good Ware; Smashicons; Becris; Monkik; Photo3idea_studio; Srip; Phatplus from
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A - Dimensions of structural inequality

South Africa

146 Inequality Report 2020