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An overview of poverty and inequality in South Africa - Working Paper prepared for DFID (SA)
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7. Conclusion
This short document has stressed the dominance of race, gender and location as deep markers of poverty and inequality. Past policies of segregation and discrimination have left a legacy of inequality and poverty and, in more recent decades, low economic growth. The historical overview of the labour market makes it clear that the high levels poverty and inequality that persist in South Africa have been aggravated by a variety of government interventions. The chief challenge of the democratic government is to attempt to undo the harm of decades of racially based policies, specifically those that impact on the labour market, either directly or indirectly.
The profiles presented here provide clear indications of the mechanisms through which policy will need to work. Household wage income is seen to be the major determinant of inequality and poverty. Many South African households have no access at all to wage income and there is wide divergence in the wages of those that are employed. Thus policy needs to be directed both at increasing the number of jobs, but also at increasing the quality of employment and earnings for those households that find themselves at the bottom of the household wage distribution.
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