07 Nov New research pegs SA black middle class at three million

A Stellenbosch University study shows a rapidly growing black middle class in South Africa, along with a dramatic decline in racial inequality. The study does, however, caution that opportunities and life chances for children from different communities still remain unequal.

This comprehensive study conducted by researchers at Stellenbosch University, who spent the past two years working with various departments to discover the truth behind South Africa’s current socio-economic climate.

Using a monthly income per capita threshold of R4,100 (in 2012 prices) the researchers found that South Africa’s black middle class has grown from 350,000 individuals in 1993 to almost 3 million individuals in 2012.

Over this period, the black share of the middle class has grown from 11% to 41%.

This latest figure is some way short of a report conducted by UCT Unilever Insitute of Strategic Marketing earlier in the year, which found that South Africa’s black middle class had more than doubled in the last eight years, growing from 1.7-million South Africans in 2004 to an estimated 4.2-million in 2012.

“That is not to justify the pace of change, but rather to dispel possible misconceptions fuelled by recent evidence of social fragmentation and racial tensions. While there is certainly still room for improvement, data on the incomes and characteristics of South African households suggests that we are making steady progress,” said Professor Hennie Kotze, research fellow at the Centre for International and Comparative Politics at Stellenbosch University.

According to the study, the income gap between race groups is the lowest it has ever been. “In terms of fundamentals, our society is slowly becoming more equitable,” said Kotzé.

The survey data showed a continuous downward trend in racial income inequality since 1993 and at the same time also a dramatic surge in black affluence.

According to Kotzé, previous studies on emergent black affluence often focused on the implications for the consumer market, but said little about the impact on the social and political landscape.

SA professor of economics, Servaas van der Berg, said patterns of consumption among the black middle class would be changing in the coming years.

He said there were misconceptions about why “black diamonds” were so obvious with their spending.

Throughout his study of consumption patterns, Van der Berg discovered that it’s not an attempt to appear middle class, but rather to build up the assets that other middle-class cultures – especially whites – have accrued through decades of affluence.

So, while affluent black people have higher income levels, they still have fewer assets than their white counterparts.

He said that once the asset base of the black middle class reached similar levels, conspicuous spending would decline, and the middle class’s patterns of consumption would become similar to those of other cultures.

Lifting constraints of apartheid

“The disassociation of race and class is creating a post-apartheid society that is more dynamic and more equitable,” he said. “After almost 20 years of democracy it is no longer true that South Africa’s middle class is mainly white – black South Africans now represent the largest share of the middle class.

“There are indications that the magnitude of this shift and the significance of these developments may previously have been overstated due to media and marketing hype and analysis with small and unrepresentative samples that focus only on the black affluent. However, our work with large representative survey samples affirms that the middle class is becoming more representative,” he added.

The researchers suggested that growing black affluence can be interpreted as an indication that South Africa’s society may be becoming fairer with opportunities increasingly distributed according to the ability and motivation of individuals.

“Our research shows that, gradually, the constraints of apartheid are being lifted.”

Researcher, Dr Cindy Steenekamp says that “the research cautions against over optimistic predictions of economic growth, political stability or social cohesion” based on this recent surge.

“Marketing hype and a focus on these individuals as consumers have fueled stereotypes and a characterisation of this group as cohesive and uniform. But our research shows that there is considerable variation within the middle class once you look below the surface.”

The study also found that racial integration and social cohesion may emerge with a substantial lag in South Africa.

Interviews conducted during the study suggested that, despite the surge in black affluence, old apartheid-era notions of socio-economic class tying class to race have endured and, consequently, some educated and rich black South Africans are reluctant to identify themselves as middle class.

“Class identity is complex. Our analysis found that the ‘middle class’ label was only weakly correlated with traditional notions of what it means to be middle class. We find some correlation between self-identification as middle class and income, assets and occupation, but not as strong as one would have expected,” said Steenekamp.

She stressed that the study found no evidence of a distinct set of so-called middle class values. “It is simply not true that the middle class has a better work ethic or places a higher value on savings or education.”

The study provides good news, but does not condone the status quo. While there are signs that race is no longer as dominant as it was before in determining economic advancement, white South Africans are still overrepresented amongst the rich, and poverty remains concentrated amongst black and coloured South Africans, the report found.

Where almost all children growing up in typical upper-middle class households will have access to electricity, clean water and decent sanitation, the report found that less than 20% of young children in lower class households have access to adequate sanitation, less than 35% have access to clean water and just over 60% have electricity in their homes.

Similarly, while 83% of children who live in upper-middle class households have access to a car, it is rare amongst the lower income classes (4%).

The starkest contrast is in terms of computers – 73% of upper-middle class children grow up with computers in their home, but virtually none of those born into lower classes have access to a computer.

Source: BusinessTech.co.za