Income inequality, jobs worry Presidency
September 25, 2009
Positive gains attained in employment between 2003 and 2009 and the attendant decline in the unemployment rate are beginning to be eroded by the current economic slowdown, said a government report on Friday.
The report points to employment gains from 11.3 million in March 2003 to 13.6 million in March 2009 and the unemployment rate going from 31.2 percent to 23.5 percent over the same period.
"The country has witnessed massive job losses in the recent months, with 267 000 jobs lost in the second quarter of 2009," according to the third instalment of the Presidency's development indicator's report.
However, says the policy unit in the Presidency, the massive public sector-led construction package and expansion of public works projects is assisting in what would have been an even greater unemployment challenge.
The report notes that over a five-year period up to March 2009, the Expanded Public Works (EPWP) programme exceeded its target by creating a cumulative total of 1.65 million work opportunities, and its second phase is planned to create a cumulative total of four million work opportunities.
More than 13 million people now receive social grants, compared to 7.87-million in 2004/05.
"The mean per capita income analysis shows an improvement in the incomes of the poorest 10% of the population rising from R783 per month in 1993 to R1,041 per month in 2008 (in 2008 rand)," says the report.
Using the living standard measure (LSM), between 2000/01 and 2007/08 there was a significant decrease in the proportion of people in lower categories (LSMs 1-3) and an increase in the size of the middle bands (LSMs 4-6).
"Income inequality in South Africa was not reduced even during the years of economic growth: while income of all sectors has improved, that of the richer segment of the society seems to have improved at a faster rate," says the report.
Using various income poverty measures, the number of people living in poverty has declined especially between 1999 and 2007, although the rate of this decline is slow.
"It seems that the decline itself may have slowed down further during 2008," says the Presidency.
"In short, these figures indicate that since 1994 significant improvements were made with regard to reducing poverty. Both the distribution of social grants as well as an improvement in the labour market, have significantly improved the income levels of especially the poor.
"However these were not enough to dent income inequality. The current economic slowdown is likely to lead to deterioration in the poverty indicators." - I-Net Bridge
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