White South Africans have been quick to complain that affirmative action and black economic empowerment policies have blocked their career opportunities and prospects for economic advancement in South Africa. However, interestingly, a review of income and employment indicators for the country does not reveal this. In fact, there is now some evidence that the white community may be the unintended beneficiary of various government empowerment and affirmative action policies.
Unemployment levels among white South Africans stood at around five percent in 2009. This was well below the national average of 23% and also lower than the figure of 27.9% for Africans. The unemployment rate for white South Africans was actually half that of the United States.
The Employment Equity Report indicates that approximately 70% of top and senior management jobs in South Africa continue to be held by white South Africans. They occupy more than half of all professionally qualified positions. Africans, on the other hand, hold less than 20% of top and senior management positions and only slightly more than 20% of all professionally qualified positions.
Annual per capita income of whites increased by 217% since 1996. This was slightly less than the 235% increase for African South Africans. White South Africans have therefore equaled the level of income growth for African South Africans, even though African incomes have grown on a much lower base. This occurred despite the fact that the government wanted to provide preferential economic opportunities to African South Africans.
Real per capita disposable income for white South Africans in 2009 was measured at just under R60 000 per year. This was six times the figure of less than R10,000 per year for African South Africans. Another income indicator shows that while white South African adults make up an estimated 13% of the population in South Africa, they are close to 70% of those earning more than R500,000 per year. Nearly 75% of adults in South Africa are African, but they account for only 20% of those earning more than R500,000 per year.
On the other side of the income scale, the poverty level in the white community was measured at 3.6% in 2008. While this figure was almost double that of 1994, it should be compared with the poverty figure of 49% for African South Africans – a figure largely unchanged since 1994. The measure used here to calculate poverty was an income of less than about R900 per month for an individual or less than R3 500 for a family of 8.
The white community is the most homogeneous of South Africa's four major racial groups. It is the only racial community that is more equal on the Gini-coefficient now than in 1994. The Gini-coefficient measures inequality on a score of 0 to 1, with 1 indicating perfect inequality and 0 indicating perfect equality where everyone would earn the same amount of income. White South Africans score on this scale at 0.45, up from 0.49 in 1996. This is approximately equal to 0.4 of the United States. The figure for the African community is around 0.6, up from 0.54 in 1996. A score greater than 0.55 is considered to indicate a very high level of inequality.
Although the incomes and living standards of African South Africans have improved since 1994, the data is clear that the standard of living of white South Africans remains significantly better than the standard of living of African South Africans.
This raises two questions. The first reason is that so many white South Africans so quickly realize that their opportunities for career advancement and economic prosperity are limited. Undoubtedly affirmative action and black economic empowerment policy is discriminatory and has closed down opportunities for whites to access easy jobs in the public service and 'easy' tenders for government functions. Yet despite these 'challenges' the standard of living of the white community has been maintained and indeed improved.
This shows that the ANC's discriminatory employment and empowerment policies have created a greater sense of entrepreneurship and independence among white South Africans. This is despite the fact that large sections of the white community have always shown a propensity for entrepreneurial activity. Now without easy jobs in the public service (or private sector) or the opportunity to do business with the government many whites have been forced to take on what he describes as an even greater 'individual responsibility' to be more independent and improve their own standard of living. Being cut off and effectively discriminated against by the state can only be the entrepreneurship, risk taking and acquisition of ever-improving levels of education and expertise that explain the maintenance and improvement of living standards within the white community after 1994.
Other examples of this increasing independence from the state could include reliance on private health care and protection, through which many whites now have access to much higher standards of service than those offered through the public sector. This independence can also be considered to include the very large number of young white South Africans who have ventured into careers in other parts of the world while still maintaining close social, familial and economic ties to South Africa.
Perhaps, therefore, the income and employment data above are early evidence that white South Africa may emerge as an unlikely beneficiary of affirmative action and black economic empowerment. It is certain that the independent and entrepreneurial mindset, further empowered by black economic empowerment and affirmative action, will become a formidable economic asset.
The second question is the opposite of the first and is why so many South Africans still appear to cling to the hope that government-driven affirmative action and empowerment policies offer them a real chance of escaping poverty. Evidence for more than a decade now shows that, apart from the establishment of a small African middle class, most Africans have been left behind. Proponents of affirmative action and empowerment policy would argue that these policies have not failed, but rather that they were not implemented or implemented properly by the government. Some people on the left in the economic field are now even advocating giving the government the right to nationalize private businesses in order to hand over this 'wealth' to the poor.
This mentality of 'the government will provide for me' is likely to continue if it is given even greater powers and responsibility through affirmative action and empowerment policies. This could also lead to more extreme economic policies, including nationalization. However, when one considers education data showing that white children significantly outperform African children in school subjects such as science and mathematics, the suggestion that the failure of affirmative action and empowerment policy lies in weak enforcement seems implausible. It is also true to argue that white money lies mainly in mines and banks. If the record of white living standards after 1994 shows that wealth now rests primarily in the mindset and skill-set of that community, an asset that the government can never seize. The failure of public education alone has destroyed the possibility that African South Africans would gain any widespread benefits from affirmative action or black economic empowerment or that they would gain much from the seizure of a major bank or mining company.
The difficulty of improving African living conditions will certainly be compounded by the mentality that has developed to believe that 'government will provide'. Because this mentality can have no possibility of competing on an equal economic footing with the increasing independence and self-reliance on display in the white community. Herein lies what may become a cliché for South Africa's future and an irony of the recent past, that affirmative action and black economic empowerment policy disempowered its greatest supporters while empowering its most ardent critics.
South Africa's 'racial communities' often appear trapped in perceptions of reality that bear little resemblance to the facts about the country. As the French philosopher Pierre Valéry commented, “A fact not properly observed is more treacherous than a faulty argument”. As a result, for many whites the argument that affirmative action would stunt their economic progress is repeated verbatim, even if their relatively high standards of living are maintained. For African South Africans the idea that the government will lead their liberation from poverty remains alive in support of the government despite growing evidence that such liberation is no longer possible. Perceptions are often more important than reality in politics and therefore the unsubstantiated perceptions of both white and African South Africans about racism and poverty in the country remain much discussed. Unfortunately, the likelihood is that maintaining this status quo is going to cause future problems for both race relations and the general stability of the country.
Frans Cronje's deputy CEO South African Institute of Race Relations. This article first appeared in SAIRR Today, the institute's weekly online newsletter.
Click here to sign up to receive our free daily Headline email newsletter