Saturday, February 27, 2010

Child poverty alongside "Youth" riches

A new OECD working paper on trends in poverty and income inequality in South Africa has found that more than half of all South Africans (54%) are poor but, among children below 10, as many as two out of three are poor. "This implies that among all poor South Africans, one in three is a child," said the OECD.

The national poverty line of 515 rand a month, or about US$4 a day, which is used for national policy making. International comparisons of lower-income countries often use the World Bank poverty line which is US$2 a day. Under this lower line, the aggregate poverty rate in South Africa is 30% but if the standard OECD poverty line, which is below half the average income, the poverty rate is 26%.

The report, based on the most recent information on incomes available, for the year 2008, indicated that South Africa's levels of income inequality and income poverty did not decrease between 1993 and 2008. According to some estimates, aggregate inequality even slightly increased. Inequality between racial groups decreased, especially during the 1990s. This did, however, not lead to a decrease in the aggregate because inequality within population groups increased, especially among Africans.Rising inequality within the labour market - higher unemployment and greater wage inequality - lies behind the increased levels of inequality.

"Poverty has increased, especially in urban areas...Race-based redistribution may therefore become less effective over time relative to policies addressing increasing inequality within each racial group and especially within the African group."

While at the same time we read that Julius Malema , head of South Africa's ANC youth league , has been accused of making 130m rand (£11m or $17m) from state contracts since 2008.He reportedly used some of his earnings to buy two lavish homes and three luxury cars, including an Aston Martin.
Malema has always presented himself as someone who understands poverty, because his mother was a single parent who worked as a cleaning lady in rural Limpopo.

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