The outstanding team at “South Africa: The Good News” recently highlighted some really encouraging wage data from the latest Adcorp Employment Index (released on 13 February 2012). Three important personal income trends have emerged in South Africa:
- After-inflation incomes have risen sharply, from R44,431 on average per year in 2000 to R61,645 per year in 2011 – a real increase of 39%, or a respectable 3.3% per year.
- Income inequality between the races, especially between blacks and whites, has declined sharply. In 2000, the average black South African earned 15% of the average white South African’s income, whereas in 2011, a typical black person earned 40% of a typical white person’s income. Currently 1.3 million blacks (or 14% of the black workforce) earn as much as or more than the average white, up from 270,000 in 2000 – an increase of more than 1 million, or 378%.
- A lot of the improvement in inequality is down to government’s involvement in the wage market. A significant number of black people now work for the government, and have experienced significant increases in salary and wages. (Nonetheless, three in five of South Africa’s highest-earning black earners are employed in the private sector – numbering around 820,000 at present.)
You can read the full report and analysis here. In my opinion, there is a slight warning sign about the number of civil servants and their bloated salaries – this MUST be offset by a focus on their efficiency and productivity, and experience in other countries is against this happening. But in general, this is a great report and excellent information, providing a healthy balance from the badly skewed data that comes out of the government’s Labour department.